NEW YORK – Home appliance maker Maytag Corp. (MYG) Friday reported a bigger-than-expected third-quarter loss, hurt by higher energy and distribution costs and weakness at its Hoover vacuum division.
Maytag shares slipped on the New York Stock Exchange (search).
The company, which has agreed to be acquired by larger rival Whirlpool Corp. (WHR) for about $1.7 billion, posted a loss of $18.2 million, or 23 cents a share.
Excluding merger-related charges of $8.5 million, but including preannounced restructuring charges, Maytag posted a loss of 16 cents a share, according to Reuters Estimates data. This was worse than analysts' average estimate of a loss of 8 cents a share.
"It was an OK quarter from the top line perspective, but the results were weaker than expected, largely due to the floor care business," said Eric Bosshard, an analyst at FTN Midwest Securities.
Investors may be more focused on Maytag consummating its deal with Whirlpool than the third-quarter results, Bosshard added.
The company said its board has scheduled a special stockholders meeting on Dec. 16 to vote on the Whirlpool deal.
Sales rose 6.5 percent to $1.26 billion, driven largely by major appliances, such as refrigerators and washing machines. Sales of commercial products were up 2.5 percent at $63.8 million, but net sales of floor-care products, such as vacuum cleaners, were down despite an increase in unit sales.
Maytag said costs related to underutilized manufacturing facilities in the United States were rising as the company increasingly used overseas sources.
Maytag, which also makes Jenn-Air (search) and Amana appliances, has struggled over the past year with higher materials costs, steep fixed expenses and lower-cost competition. It has cut its 2005 profit estimate at least twice this year.
A big drag on performance has been Hoover, which has seen a drop in sales as consumers choose rival vacuums.
Maytag shares have fallen about 18.5 percent this year, while Whirlpool stock has risen about 7.4 percent. The stock closed at $17.19 Thursday on the New York Stock Exchange.
In August, Maytag agreed to be acquired by Whirlpool for $21 a share. The deal, which would create the world's largest appliance maker, is expected to close next year if U.S. regulators approve it.
On Thursday, Whirlpool reported a 13 percent rise in quarterly profit, topping analysts' estimates, as U.S. market share rose and cost cutting and price increases helped offset energy and metal costs.
The company also stood by its previous earnings forecast for the full year.
Maytag shares were off 9 cents at $17.10, Whirlpool's shares added 1 cent at $74.38.