Maytag reported that higher sales of refrigerators and laundry products were offset by charges and lower sales of floor-care products.
The company reported a 6.9 percent increase in fourth-quarter home appliances segment sales, up to $1.19 billion, from $1.11 billion in the same three months the previous year. Refrigeration shipments were especially robust, Maytag said, while its service and repair operations enjoyed double-digit revenue growth year-over-year.
The home appliance segment, which includes majaps and floor care, reported an operating loss of $71.9 million in the fourth quarter, ended Dec. 31, compared with a loss of $4.9 million year-on-year, due largely to lower factory capacity utilization, continued sales declines and price erosion in floor care, and higher distribution costs.
Fourth-quarter results were also impacted by restructuring charges of $42.1 million, other charges of over $18 million and $10.2 million in merger-related expenses.
“We showed solid top-line sales growth during the quarter with increases in all our major appliance product categories,” said Ralph Hake, chairman/CEO. “However, 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, which currently is undergoing merger proceedings with Whirlpool, said it plans to address its profitability over the next several quarters by continuing to pursue business improvement initiatives. “We also expect to evaluate alternative strategies for our floor-care product line and commercial businesses,” said Hake, “including their possible sale.” (See story, right.)
With the proposed merger currently being reviewed by the Antitrust Division of the Department of Justice, Maytag and Whirlpool have agreed not to close the proposed merger before Feb. 27, 2006, with the Antitrust Division's concurrence. Both companies continue to expect the transaction to close as early as the first quarter of this year.
Consolidated Maytag sales for the fourth quarter climbed 6.6 percent to $1.24 billion from a year-ago $1.16 billion. Net loss reached $75 million, compared with a loss of $14.1 million in the same quarter in 2004.
For the 12 months, home appliance sales were up 4.6 percent to $4.7 billion from $4.5 billion, while operating income for the year was recorded as a negative $24.2 million, compared with operating income of $47.5 million year-over-year.