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Maytag Q2 Majap Sales Climb

7/17/2001 11:49:00 AM Eastern

Newton, Iowa - Despite lower industry sales for major appliances, No. 3 vendor Maytag said it enjoyed strong sales of washers, dryers and dishwashers in the second quarter, which led to an overall increase in sales of majaps, compared with the second quarter last year.

Margins on sales of majaps were depressed primarily as a result of the competitive pricing environment associated with a weaker industry, said Maytag.

An unexpected decline in industry volume of floor care products during the second quarter ended June 30 - which reversed a trend in industry growth - combined with majaps to record a nearly 1 percent decline for the three months in Maytag's Home Appliance segment. Net sales were $941.9 million, down from $948.8 million in the second quarter of 2000. Operating income for the segment was $70.2 million, off 51 percent from the $143.3 million recorded in the second quarter of 2000.

For the six months, net sales in the Home Appliances segment dipped nearly 1 percent to $1.89 billion, compared with $1.90 billion in the same period last year. Operating income for the segment was $155.2 million, down 46.3 percent from the $289.3 million recorded in the first half of last year.

Overall sales at Maytag in the second quarter were down 3.2 percent to $1.07 billion, compared with $1.10 billion in the second quarter last year. Operating income was $61.2 million, a drop of 57.1 percent from the $142.7 million recorded in the same three months in 2000. Net income decreased 66.3 percent to $25.5 million, before the effect of an accounting change, compared with $75.7 million in the same three months last year.

For the six months, Maytag's consolidated sales dipped 2.5 percent to $2.15 billion, down from $2.20 billion in the year-ago first half. Operating income decreased 52.5 percent to $135.7 million, compared with $285.7 million in last year's first half. Net income in the first half dropped 60.5 percent to $59.8 million, before the effect of an accounting change and tax benefit, compared with $151.6 million in the year-ago period.

Looking ahead, Ralph F. Hake, Maytag's new chairman/CEO, said, 'Although business conditions will remain challenging, we expect improvement in the second half of this year. The previously announced acquisition of Amana Appliances, which we still expect to complete in the third quarter, will provide a significant opportunity to aggressively leverage our market position, reduce our cost structure and strengthen our major appliance business.'