American Italian Pasta Plunges

Accounting irregularities take a toll on the spaghetti maker.
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American Italian Pasta

(PLB)

plunged 29% after the spaghetti maker delayed its earnings report and a related regulatory filing to probe accounting irregularities.

The Kansas City, Mo., company also said it would post third-quarter and full-year losses as a result of weak sales and a series of charges totaling $61 million. The company had been due to post quarterly numbers Wednesday but said it would delay that report and its 10-Q to look into its accounting problems.

American Italian said its board's audit committee is probing internal control weaknesses, needed restatements and past bookkeeping errors. The company said in late 2004 and early 2005, it received inquiries from the Philadelphia and New York stock exchanges concerning trading activity in its stock "by persons outside of the Company, during time periods surrounding certain of the Company's public announcements." American Italian has since been in talks with the staff of the

Securities and Exchange Commission

.

The company said it would post a third-quarter loss on sales of $91 million, down 13% from a year ago. Analysts had been looking for a 25-cent profit on sales of $98 million.

On Wednesday, American Italian fell $6.17 to $14.77.