Home appliance giant Maytag Corp. said Tuesday that it expects first-quarter results to surge past analyst forecasts, driving its stock to its highest level since January 2000.
Newton, Iowa-based Maytag said, however, that strong sales in January and February may not maintain their pace through the year, as a 10 percent industrywide sales increase from year-ago levels in those months was in part due to dealers replacing depleted inventory.
Nevertheless, Maytag said, first-quarter sales will be up about 20 percent from $1.08 billion a year earlier and that earnings will be between 70 and 75 cents a share, easily exceeding analysts’ consensus estimates of 48 cents a share.
“It is now clear that our earnings will substantially exceed both our fourth-quarter performance and our previous first-quarter expectations,” said Ralph Hake, Maytag chairman and chief executive.
Shares of Maytag gained 11.4 percent to $45.30 on the New York Stock Exchange.
Maytag shares have risen by 46 percent this year, and have risen 64 percent since tech stocks peaked in March 2000.
Analysts have said appliance sales have been helped by low interest rates, continuing high new-home sales and consumer interest in spending on their homes after the Sept. 11 terrorist attacks.
But the high levels of consumer spending during a recession continue to surprise analysts.
“In a traditional recession or recessionary downturn, consumers get their balance sheet in order,” said Eric Jemetz, senior equity analyst at New Amsterdam Partners. “They stop spending. But this hasn’t happened, and balance sheets on the consumer side remain extended.”
The risk at this point, Jemetz said, is that rising interest rates as the economy recovers may cut into consumer spending on home appliances and other goods.
