American Power Misses Estimates, Rescinds Guidance for 2001

Earnings Scorecard
Actual	Estimated*	Year-Ago
$0.20	$0.23	$0.34

American Power Conversion(APCC Quote - Cramer on APCC - Stock Picks) reported fourth-quarter earnings this afternoon that missed Wall Street's estimates by 3 cents, a result the company attributed to industry softness, the weakening economy and tough comparisons with the year-ago period.

On top of that, the company offered a pretty bleak forecast and told investors to forget they ever heard the previous guidance for 2001.

Shares of American Power closed at $14.50 in regular Nasdaq trading today, but tumbled to $12.88 in after-hours Island activity.

For the fourth quarter ended Dec. 31, American Power earned $38.4 million, or 20 cents a share, down from $66.5 million, or 34 cents a share, in the year-ago period. Two analysts surveyed by First Call/Thomson Financial initially expected the company to earn 28 cents a share, then lowered the consensus estimate to 23 cents.

American Power, which makes surge supressors, uninterruptible power supplies and other products, posted fourth-quarter revenue of $407.3 million, up 4% from $390.6 million in the same quarter one year ago.

In a press release, American Power said "the macroeconomic outlook for 2001, while also subject to a fair amount of uncertainty, has weakened across many areas. In light of this, it is imperative for APC to take steps during the first quarter to better align operating expenses and production capacity with these realities." The company added that "we expect to complete and announce actions to support these efforts after the end of the first quarter. These pending actions and murky industry outlook have combined to make providing the public with accurate financial guidance exceedingly difficult; therefore, we are rescinding our previous guidance for the year 2001."

When American Power released its third-quarter earnings last October, the company projected a revenue growth rate percentage "in the low- to mid-teens" with net income growth of 5% to 15% for 2001. The company, which is based in West Kingston, R.I., forecast that earnings for the first half of the year would be down slightly year-over-year, before the bottom line growth rate picked up in the second half.

On Jan. 2, the company lowered that guidance, saying revenue growth would be in the range of 5% to 10% for the full year, while earnings per share growth would be flat to up 5%.