plummeted Wednesday after the company said it is inspecting up to 3,000 engines for metallurgical flaws, nearly tripling its original estimate, causing the provider of electronics, communications and systems engineering products to take an expected $12 million charge in the second quarter.
The Los Angeles-based company's
Teledyne Continental Motors
unit originally estimated that 1,100 engines had possible flaws in some of the crankshafts, which resulted from "several discreet periods of steel production and forming operations by its suppliers."
Teledyne shares fell 1 1/2, or 11%, to 11 9/16 in late morning trading. (Teledyne closed regular trading down 1 9/16, or 12%, at 11 1/2.)
The charge being taken is associated with the inspection and replacement of the crankshafts, the company said in a statement. Teledyne is also reviewing its options with regard to cost recoverability and has begun legal action against certain suppliers.
Analysts surveyed by
First Call/Thomson Financial
projected the company to earn 38 cents per share in the second quarter.