ATLANTA – Appliance maker Maytag Corp. (MYG) on Friday reported worse-than-expected quarterly results as sales of Hoover vacuums (search) fell and steel costs rose, and slashed its 2005 outlook on an expected loss of sales at key retailers.
The maker of Jenn-Air (search), Maytag and Amana appliances posted a net loss of $14.1 million, or 18 cents a share, compared with net income of $23.9 million, or 30 cents a share, a year earlier.
The 2004 quarter included charges of 26 cents a share related to a restructuring and reserves tied to litigation over front-load washers.
Excluding charges, Wall Street analysts on average had been expecting profit of 17 cents a share.
Shares of Maytag fell 5.5 percent to $16.12 in premarket trade on the INET electronic network, down from a close of $17.05 on Thursday on the New York Stock Exchange (search).
Maytag, based in Newton, Iowa, cited higher steel and energy costs and lower sales of Hoover vacuums and vending equipment. Sales fell 8 percent to $1.16 billion.
"I think they are doing the right things in terms of taking costs out of the business, but they're continuing to face challenges in floor care," said FTN Midwest Research analyst Eric Bosshard.
Maytag is cutting jobs in a restructuring that it expects to save $150 million annually but faces sizable hurdles, including reviving Hoover and fending off new competition for retail space from foreign brands such as LG Electronics (search) of South Korea.
Electronics seller Best Buy said earlier this month that it would stop selling Maytag's washers and refrigerators to make room for other appliance brands. Maytag is also expected to lose sales at Home Depot , which is adding LG appliances this year.
The company lowered its 2005 earnings outlook to a range of $1.10 to $1.30 a share, including about 5 cents in restructuring charges. It had previously forecast 2005 earnings in a range of $1.50 to $1.60 a share, including the 5 cents in restructuring charges.
Analysts currently expect profit of $1.39 a share for the year, according to Reuters Estimates.
Maytag said it expects to benefit from new products including a Jenn-Air suite of reflective glass appliances and price increases announced last year.
"I'm confident they'll get pricing, it's just that there's a lot of offsets at this company to the benefits of those price increases," Bosshard said.