Whirlpool Selling Amana

Noncore Maytag brands go on sale.
Publish date:

Whirlpool (WHR) - Get Report said it would sell the Hoover floor-care, Dixie-Narco vending systems, Amana commercial microwave and Jade commercial-products appliance businesses acquired in its recent buy of Maytag.

The Benton Harbor, Mich., appliance giant also boosted its Maytag cost-savings estimate to $400 million or more, saying it expects to cut costs on product manufacturing, infrastructure and support areas, global procurement and logistics. The company had previously estimated merger savings of $300 million to $400 million.

Whirlpool also refined its pretax charge estimate tied to the cost-cutting to $450 million from the previous range of $350 million to $500 million. Whirlpool, which acquired Maytag March 31, said earlier this month it would cut 4,500 jobs at the struggling acquired company.

"Our increased savings estimates further demonstrate the value creating opportunity of this acquisition," said CEO Jeff Fettig. "The actions we have recently announced -- including the consolidation of laundry production into our Clyde and Marion, Ohio, facilities -- will represent a significant portion of our expected annualized savings."

Whirlpool said it has received "strong interest from a number of potential buyers" of the vending, vacuum, microwave and commercial-appliance units. It expects to complete the transactions by the end of this year.

The company also revised its guidance to reflect the integration of Maytag and now expects full-year 2006 earnings per diluted share from continuing operations of $6 to $6.25, compared to the pre-acquisition range of $7 to $7.25. Analysts were looking for $6.22.

Whirlpool said it expects 2007 full-year earnings per diluted share to be approximately $9. Analysts surveyed by Thomson Financial were looking for $7.98.

On Tuesday, Whirlpool rose $1.29 to $85.91.