Maytag, Whirlpool Stocks Down as Steel Concerns Weigh
Sep 24, 2004
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Shares of U.S. appliance makers Whirlpool Corp. and Maytag Corp. fell on Thursday amid concerns about high raw materials costs after Sweden's Electrolux warned its profits would be hit by soaring steel prices.
Maytag, whose stock fell more than 4 percent, was one of the biggest percentage losers among the S&P 500. Whirlpool's stock eased more than 2 percent.
"It's higher raw material prices," said David MacGregor, an analyst with Longbow Research. He said higher prices of steel, plastics, and other materials would weigh on manufacturers over the next couple of quarters.
Earlier Thursday, Electrolux warned that soaring steel prices would hurt its second-half operating income by about U.S. $68 million. The maker of Frigidaire products said it was no longer possible to offset materials price rises with internal measures.
Rising materials prices have been an issue for makers of a number of products, including autos and cooling systems. To help offset these costs, Whirlpool has raised prices of some appliances worldwide.
Mr. MacGregor said companies would continue to have a hard time raising retail prices. "The lag associated with the immediate increase in raw material costs combined with the delayed ability to pass through higher retail prices means margins will be under pressure for the next two quarters at least," he said.
On the New York Stock Exchange, Maytag shares fell $0.85 to $18.62, while Whirlpool stock was down $1.36 at $61.67. (Reuters)
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