Maytag stock surges on strong outlook

Maytag stock surges on strong outlook
 
Date November 10, 2004
Section(s) Local News
   
 
NEWTON (Dow Jones/AP) — Maytag Corp. said price hikes and cost cutting could help it earn $1.50 to $1.60 a share in 2005, well above what the company is likely to earn this year.

The Newton-based appliance maker Tuesday said its forecast includes restructuring and other charges of about 5 cents a share.

Analysts were expecting 2005 earnings of $1.59 a share, according to Thomson First Call.

New York Stock Exchange-listed Maytag shares closed Tuesday at $20.27, up $1.74, or 9.4 percent, with more than 4.7 million shares traded. At 10 a.m. today, the stock had dropped 25 cents to $20.02.

Maytag has suffered in recent quarters from high steel and energy costs as well as declining sales by its Hoover vacuum cleaner unit.

Last month the company said it expects to earn 5 cents to 10 cents a share in the fourth quarter, on top of a profit of 6 cents a share for the first nine months of 2004.

On Tuesday, Maytag said cost cutting, as well as price increases, including a 5 percent to 8 percent hike effective on Jan. 3, would help revive its business.

“We completed many milestones in 2004,” said Maytag Chairman and CEO Ralph Hake, “including a successful systems conversions, a plant closing and good progress in cost reduction and, in the third quarter, saw positive sequential improvement in our financial performance. However, 2004 has been a challenging year related to Hoover floor care sales volumns and, more particularly, with the rapid increases in steel and energy-related costs.”

Maytag plans to hold a conference with analysts on Nov. 19 in New York City where it will update investors on business operations and plans for the future.

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