Ceradyne Slumps After Cutting Its Profit Outlook

NEW YORK (AP) — Shares of Ceradyne Inc. tumbled Tuesday after the ceramics products maker slashed its 2009 earnings guidance by more than half on expectations of lower armor shipments and further weakened demand for industrial ceramics.

In midday trading, the stock fell $3.45, or 15 percent, to $19.92.

The Costa Mesa, Calif., company said it expects to earn 70 cents per share in 2009, far below previous guidance of about $1.60 per share. Analysts polled by Thomson Reuters, on average, forecast income of $1.48 per share.

Ceradyne also said it expects 2009 sales from $420 million to $440 million, a drop from its earlier guidance of $465 million to $500 million. Analysts predict $461.9 million in sales.

Morgan Joseph analyst Michael French, who said he was not entirely surprised by the reduced guidance, maintained his "Hold" rating on the stock.

"Despite the attempt to add new business and cost-cutting initiatives, we continue to believe the unknowns behind several of Ceradyne's operating segments are too great to recommend the shares," he said.

In the past 52 weeks, the shares have ranged from $14.27 to $50.51.