Maytag Sees 1st-Quarter Profit Falling Short

Maytag Corp., which has missed earnings forecasts four times in the last 14 months, said first-quarter profit will be lower than expected because it cut prices on Hoover vacuums and increased advertising spending. Although profit excluding one-time items will be higher than the fourth quarter’s 40 cents a share, it “will be a challenge” to meet the 45-cent average estimate of analysts polled by First Call/Thomson Financial, Maytag said. Profit margins narrowed after a slowdown in U.S. consumer spending led retailers to order lower-priced vacuums, a spokesman said. Soft-drink bottlers also ordered fewer Dixie-Narco vending machines. “Hoover is their biggest-margin business and roughly twice as large as the vending business, so lower prices have a big impact,” said Merrill Lynch & Co. analyst Justin Maurer, who rates the stock near term “neutral.” Shares of Newton, Iowa-based Maytag fell 40 cents to close at $31.79 on the New York Stock Exchange. Maytag is the third-biggest U.S. maker of large appliances, after Whirlpool Corp. and General Electric Co.