were getting crushed after the company reported lower sales and earnings in the first quarter, and said full-year earnings would miss estimates.
Des Moines, Iowa-based Maytag earned $34.5 million, or 44 cents a share, on sales of $1.14 billion in the first quarter, down from earnings of $56.8 million, or 73 cents a share, on sales of $1.18 billion. The latest quarter included a pretax charge of $9.4 million, or 8 cents a share after tax, to close a factory. Analysts had been forecasting earnings of 57 cents a share.
"Industrywide sales of floor care products were down dramatically in the first quarter, and sales volume, pricing and mix of our Hoover floor care products sharply declined," the company said. "Our major appliance sales were also less than expected in an industry that was down 1.8%."
The shares were recently off $3, or about 14%, to $18.86.
The weak earnings caused Standard & Poor's to put the company's long-term and senior credit rating on CreditWatch with negative implications. It cited "heightened concern that the company's earnings weakness, combined with soft industry conditions, will result in substantially weaker than expected financial performance and credit protection measures in the intermediate term."
To counter the earnings trend, Maytag said it will cut 500 jobs, or about 8% of its workforce, and implement other cost reductions that will save it $20 million a year. It plans a charge of that size in the second quarter.
Maytag said it expects full-year earnings of $1.80 to $1.90 a share, including a total of 50 cents in charges, reflecting a "challenging" second quarter. Analysts polled by First Call were expecting earnings of $2.73 a share for all of 2003.