CHESTERFIELD, Mo. (AP) â¿¿ Insituform Technologies Inc. expects to earn far less in 2011 than previously estimated because of bad weather and project delays that are hurting its North American sewer business.
Shares of the pipeline company, based in Chesterfield, Mo., plunged as much as 15 percent Thursday after the morning announcement.
Insituform said it expects to earn $1.30 to $1.40 per share in 2011. That's 26 to 36 percent below the company's earlier guidance of $1.75 to $1.90 per share, cited in a March investors' presentation.
The company said it expects to earn 20 to 22 cents per share in the second quarter. Both projections exclude one-time items and potential restructuring costs, the company said.
The new guidance is much weaker than analysts expected. Before the announcement, they anticipated earnings of $1.70 per share in 2011, according to FactSet data. They expected Insituform to earn 41 cents per share in the second quarter.
Insituform's North American sewer rehabilitation business has barely recovered from its weaker-than-expected first quarter, President and CEO Joe Burgess said. He said delays in project bids and severe weather are weighing on the division.
"These issues have pressured project management and crew operations, causing lower than expected project performance," Burgess said. Insituform now expects the division to generate about $25 million less this year in operating income than its earlier estimate.
Burgess said the North American sewer business is expected to recover somewhat in the second half of the year. He noted that Insituform's energy and mining business and its European and Asian sewer operations are on track with previous estimates.
Burgess said the company will "implement fundamental changes" to the troubled division.
In an effort to reduce panic-selling, the Nasdaq exchange halted trading of the stock just before the news was announced. Trading was allowed to resume about 20 minutes later. Exchange operators sometimes freeze trading of companies that are releasing market-moving news.