Shares of Playtex ( PYX) plummeted 25% in morning trading after the company warned that second-quarter earnings will fall below projections.

The company cited unfavorable growth trends and the impact of the poor weather on certain business categories. Playtex also said Thursday that its credit agreement has been changed. Recently, shares of the company were down $1.97 at $5.70 on the news.

Westport, Conn.-based Playtex now expects to earn 8 cents to 10 cents a share in the second quarter, compared with 32 cents a share in the second quarter last year. Analysts were expecting the company to earn 23 cents a share. The company also said discounts in previous quarters pulled demand forward.

"Tampon shipments began to mirror consumption levels in the month of June so it appears that the promotional inventory impact is largely behind us," said Michael R. Gallagher, Playtex's chief executive. "We have established our revised guidance with a more conservative view toward economic and category recovery rates. The lower earnings trend resulting from our defensive efforts and near-term shipment levels have necessitated that we amend the terms of our credit agreement."

The consumer products company now expects second-quarter revenue to be 10% lower than the sales of $201.6 million in the year-ago period. Analysts expect $199.7 million.

EPS in 2003 are expected to be 42 cents to 45 cents. Analysts currently expect 74 cents a share. Full-year earnings will be impacted by the second quarter's lowered guidance and the assumption that category trends and economic conditions seen in the first half of 2003 will continue, Playtex said. The company earned 90 cents a share in 2002.

The company said revenue in the second half of 2003 is expected to be below 2002's second half by low single digits. Full-year 2003 revenue is expected to be about 5% to 6% below 2002's total sales of $719.1 million. Analysts expect $709.8 million in 2003.

Lastly, the amendment to Playtex's credit agreement provides for revised financial covenants and increases the interest rate margin, the company said. Revised pricing for certain loans will be increased by 125 basis points and by 100 basis points for Playtex's revolving credit line. The updated pricing would increase the company's interest expense by about $5.5 million annually, already incorporated in the revised earnings guidance, the company said.