updated 4/22/2005 8:42:42 AM ET 2005-04-22T12:42:42

Appliance maker Maytag Corp. said Friday that profit plunged in the first quarter as dwindling sales and rising costs drained its bottom-line results.

The company, however, cut its projected annual earnings by more than half, indicating that it plans to take “more aggressive steps” to restructure its manufacturing operations and cut costs.

Quarterly income fell to $7.7 million, or 10 cents per share, for the three months ended April 2 from $38.7 million, or 49 cents, in the year-ago period. Earnings include restructuring charges amounting to about 4 cents per share, the company said.

Maytag’s earnings — excluding the charges — came in well below the average estimate of 20 cents per share from analysts polled by Thomson Financial.

Sales shrank 4 percent to total $1.17 billion from $1.22 billion a year earlier, just missing the $1.18 billion targeted by Wall Street analysts.

Declining sales of refrigerators and lower average prices for vacuum cleaners drove down appliance sales 3 percent to $1.11 billion, while commercial business dropped 26 percent to $54.7 million amid a continued slump in the vending industry, Maytag said.

Meanwhile, Maytag Services and Maytag International both generated double-digit revenue growth last quarter, the company added.

Looking ahead, Maytag now sees yearly earnings of 45 cents to 55 cents per share, including about 10 cents worth of restructuring expenses. That estimate is down sharply from earlier guidance of $1.10 to $1.30 per share.

Analysts currently see income of $1.10 per share on $4.77 billion in sales, compared with a profit of 88 cents and $4.72 billion in sales for 2004.

The Maytag report came a day after rival Whirlpool Corp. said first-quarter profit fell 14.9 percent because of higher costs for fuel and raw materials. The maker of Whirlpool and KitchenAid home appliances said net income fell to $86 million, or $1.26 per share, in the January-March period from $101 million, or $1.43 per share, a year ago. Sales increased 6.7 percent to $3.21 billion from $3.01 billion.

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