« Credulity Syndrome, Fri., April 22, 2005, 8:28 AM | Main | Nasdaq acquires Instinet Group, Fri., April 22, 2005, 2:38 PM »
April 22, 2005
Maytag is key marker, Fri., April 22, 2005, 9:44 AM
In a seminar I put on for clients about twenty years ago, I used overheads of 175-day price charts in which I had removed the names of two companies and the prices. I asked the audience to tell me which industries they thought these companies might be in. The audience thought it was a trick question as most of them thought I was showing the same chart. So I overlaid one overhead onto the other, and the audience could see minute differences. But they had no clue.
One chart was Maytag (NYSE: MYG) and the other was Ford (NYSE: F). The audience was momentarily stunned.
Then I asked them to tell me why, if consumers had no money to buy Maytag appliances, would they have the funds to buy automobiles.
Since that day, for quite a few people in that audience, I am sure that MYG is a key marker for what is happening in the U.S. economy.
Maytag Posts Lower Profit, Cuts Outlook
Fri Apr 22, 2005 07:41 AM ET ATLANTA (Reuters) "
"Maytag Corp on Friday reported an 80 percent plunge in first-quarter profit as it struggled with lower sales and higher steel and energy costs, and the company slashed its profit view for the year.
Maytag said it must take more aggressive steps to reduce its manufacturing costs, and said a new financing plan would fund initiatives to accomplish that.
The maker of Hoover vacuum and Jenn-Air and Amana appliances said first-quarter earnings fell to $7.7 million, or 10 cents per share, in the quarter ended April 2, down from $38.7 million, or 49 cents per share, the year before.
The Newton, Iowa, company said the 2005 quarter included pr-tax restructuring and related charges of $4.9 million, or 4 cents a share.
Sales fell 4 percent to $1.17 billion, and Maytag cited lower vacuum prices, lower refrigerator sales and a loss of business at retailer Best Buy (NYSE: BBY), which stopped selling Maytag appliances earlier this year to focus on other brands.
Maytag said sales were down 2.8 percent for major appliances and 26 percent for commercial products, which includes vending equipment.
Savings from restructuring moves only partly offset rising costs for steel and energy-related items, Maytag said.
Hoover sales, which have been a drag on earnings over the past year as consumers migrated to rival brands, were down but Maytag said it saw stabilization in market share in some floor care categories.
Maytag now expects full year profit of 45 cents to 55 cents a share, including about 10 cents in restructuring charges. Earlier this year, it had forecast profit of $1.10 to $1.30 a share, including about 5 cents in restructuring charges. Analysts had been expecting profit of $1.10 a share, according to Reuters Estimates."
MYG is in the GICS consumer cyclical household appliance manufacturers sub-industry 25201040, while Ford is in the auto manufacturers 25102010.
Posted by Posted by Bill Cara on April 22, 2005 09:44:45 AM | Category: 25 Cons Discretionary
Do you think Whirlpool's decent report was an anomoly, or is Maytag an early warning? Thanks.
Posted by: Josh Silverman at April 22, 2005 12:37 PM [link]