NEW YORK ( TheStreet) -- Shares of Clarcor (CLC - Get Report) slumped in late trades Wednesday after the Franklin, Tenn.-based maker of filtration and industrial products fell short of Wall Street expectations with its fiscal third-quarter results.
The company posted a profit of $32.1 million, or 63 cents a share, for the three months ended in August on revenue of $284.8 million, up from its year-ago equivalent earnings of $28.3 million, or 55 cents a share, on revenue of $262.8 million, but below the average estimate of analysts polled by Thomson Reuters for earnings of 66 cents a share in the August period on revenue of $295.3 million.
Clarcor acknowledged that its business in China was less robust than anticipated in the quarter but stood by a year-end goal.
"The slowdown in China in the third quarter was the result of softer demand from our OEM first-fit customers as they adjusted their production schedules," said Norm Johnson, the company's chairman and CEO. "We expect a return to higher growth in China in the fourth quarter and still expect our China heavy-duty engine filter sales to grow approximately 30% for the full year--our original target for 2011."The stock was last quoted at $42, down 8.4%, on volume of around 16,000, according to Nasdaq.com. Based on a regular session close at $45.84, the shares were up nearly 6% so far in 2011. The company's gross margin of 33.7% was below its year-ago performance, which Clarcor's Johnson attributed to "additional costs that we incurred to launch a new air filtration product and a higher sales mix of capital vessels versus aftermarket filters in our natural gas market." Clarcor maintained its outlook for earnings of $2.25 to $2.40 a share for 2011, and said it expects profits to come in at the upper end of this range assuming no major economic disruptions in its fiscal fourth quarter ending in November. However the company added that it's entered the fourth quarter with "some caution." "We experienced some challenges with slower economic activity in Europe and China in the third quarter, and uncertainty prevails in the U.S. economy going forward," Johnson said.