Samurai Appliance Repair Man
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|From the Wall Street Journal:
Home-appliance maker Maytag Corp., which is being acquired by Whirlpool Corp., on Friday reported a wider fourth-quarter loss as sharply higher costs offset modest sales growth.
The Newton, Iowa, company also said it will explore selling its financially ailing Hoover floor-care and Dixie-Narco vending-machine businesses. Whirlpool, which intends to complete the deal in the current quarter pending regulatory approval, said it "looks forward to reviewing any proposals Maytag may present, within the framework of our merger agreement."
Maytag lost $75 million, or 93 cents a share, compared with $14.1 million, or 18 cents a share, in 2004's final quarter. The recent results included hefty charges, including 32 cents a share for restructuring manufacturing operations. Asset and goodwill impairment charges totaled 17 cents a share, while merger-related expenses were 13 cents a share.
Sales rose to $1.24 billion from $1.16 billion in the year-earlier quarter, helped by a 7% rise in sales of home appliances, driven by refrigeration products.
Maytag attributed the losses to underused manufacturing capacity, a "disappointing" performance in its floor-care segment due to low volume and prices, and higher distribution costs.
"I am extremely disappointed that our positive sales gains in major appliances were more than offset by our overall high cost structure and poor floor-care performance," Maytag Chairman and Chief Executive Ralph Hake in a prepared statement. In a conference call, Mr. Hake called the Hoover business "a major disappointment."
For the full year, losses widened to $81.9 million, or $1.02 a share, from $9 million, or 11 cents a share, in 2004. Annual sales increased to $4.9 billion from $4.72 billion in 2004.
In contrast, Whirlpool has been posting solid results. On Thursday, the Benton Harbor, Mich., company reported a fourth-quarter profit of $126 million, or $1.83 a share, up from $97 million, or $1.44 a share, in the fourth quarter of 2004. Sales rose to $3.95 billion from $3.63 billion in the year-ago period.
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