Credit analysts lower their outlook for Maytag

Credit analysts lower their outlook for Maytag
Date	July 27, 2004
Section(s)	Local News
Brief
DES MOINES (AP) — Two credit analysts lowered their outlook for Maytag Corp. Monday citing weaker-than-expected second quarter financial results. Standard & Poor’s Ratings Services revised its outlook for the Newton-based appliance manufacturer from stable to negative. A report by analyst Jean C. Stout expressed a concern that Maytag “will be challenged to improve its operating performance and market share in the near term despite actions taken to reduce its cost structure, improve its operating efficiency, and launch new products.” Maytag‘s short-term corporate credit and commercial debt ratings were lowered to A-3 from A-2. Ratings for long-term corporate credit, senior unsecured debt and medium-term note programs were maintained at the previous BBB level. Maytag had about $1.1 billion of debt outstanding at July 3, 2004. Fitch Ratings downgraded Maytag‘s senior unsecured rating to BBB- from BBB and its short-term debt rating to F3 from F2. Its rating outlook for Maytag remained negative. “Fitch expects operating earnings to remain under pressure in the near term as steel costs remain high and actions to reduce high inventory levels negatively impact sales and operating profits,” analyst Thomas P. Razukas said in his report. Maytag‘s chief executive told analysts Friday that efforts to cut costs through closing an Illinois refrigerator plant, seeking concessions in labor contracts and a corporate restructuring that eliminated 1,100 jobs will improve the company’s outlook. The introduction of newly designed refrigerators and vacuum cleaners also should help improve sales in coming months, said CEO Ralph Hake. Maytag posted a second quarter loss of $41.1 million, or 52 cents a share on Friday. Sales for the quarter were $1.15 billion, down 1 percent from $1.16 billion from a year ago. Maytag‘s stock was up to $19.76 after falling to $18.54 on Friday.

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