Maytag Predicts Profit Dip, Says It Will Revamp

NEWTON, Iowa — Maytag Corp. warned of a big fall in quarterly profit Monday and unveiled a reorganization to combat weak sales for appliances in North America and Europe.

The company said third-quarter earnings would be a third less than the 23 cents a share it reported a year ago because of losses in Europe, start-up costs for a new facility and new products, and fierce price competition.

Maytag also said it would take a $95-million pretax charge to restructure its appliance operations, whose brand names include Hoover, Magic Chef, Admiral, Norge and Jenn-Air.

“Third-quarter earnings this year, before reorganization charges, may be about two-thirds of the 23 cents per share earned in the third quarter of 1991,” President Leonard Hadley said.

Maytag stock fell $1.375 to $12.875 per share on the New York Stock Exchange.

Effective Jan. 1, Maytag plans to consolidate Magic Chef’s sales and marketing operations, as well as most of its financial and information systems functions, with its Indianapolis-based Jenn-Air division.

Magic Chef’s washer and dryer plant in Herrin, Ill., will also be realigned under Maytag Co. to combine expertise in laundry equipment manufacturing.

“One of the principal benefits is that we will be taking our major appliances to the marketplace in a more effective and a more economical manner,” Hadley said.

“Our two sales organizations will each be offering a higher-priced line as well as a middle-priced line, and this can enhance the position of all our brands on dealers’ floors.”

Maytag will also restructure its Hoover North America operations.

Hadley blamed losses at Hoover in Europe on excess capacity and further deterioration in economic conditions, especially in Britain.

“Consequently, our reorganization thrust in the months ahead will be aimed at downsizing production capacity and streamlining sales, marketing, administrative and distribution operations in Europe,” he said.