Maytag has today reported a fourth-quarter loss that widened fivefold compared to a year ago due to restructuring and merger charges related to its pending takeover by rival Whirlpool.
Maytag said it was considering selling its poor performing vacuum-cleaner business, including the Hoover brand to which it owns the US rights.
Maytag, which is waiting for anti-trust approval of the $1.7 billion deal with Whirlpool, said it lost $75m, or 93 cents per share, compared with a loss of $14.1m, or 18 cents per share in the previous year. Excluding charges in the company’s loss widened by just over 260 per cent, from $15.7m in the previous year to $56.70.
The loss exceeded analyst forecasts of 13 cents a share.
A revenue increase of 6.6 per cent was dented by the poor performance of Maytag’s vacuum cleaner and commercial business, which suffered a 1.1 fall in sales. The results prompted Ralph Hake, chief executive, to say that “expect to evaluate alternative strategies for our floor care product line and commercial businesses, including their possible sale”.
The fourth-quarter operating loss of the home appliances business was seven times the size of that in commercial products and rose almost sixfold compared with the previous year. Meanwhile, the loss in home appliances widened by almost 1,400 per cent compared to the year-ago quarter.
Mr Hake said Maytag’s “overall high cost structure” also weighed on the company’s performance. Maytag and Whirlpool have lobbied in Washington for approval of their merger, arguing that heightened competition from Chinese-manufactured appliances warranted the combination of two companies that would have a combined market share of 70 per cent in washers and dryers.
For the full year, Maytag reported a 3.8 per cent increase in revenues to $4.9bn, from $4.7bn in the previous year. The company lost nine times as much as in the previous year, or $81.9m, compared with $9m.