RC2 ( RCRC) sank 15% late Thursday after blaming rising zinc costs for a weak fourth quarter.

The Oak Brook, Ill., toymaker said it expects earnings for the full year to fall below RC2's previous forecast of $2.52 to $2.62 a share. The company said results will be hit by a 48-cent loss tied to discontinued collectibles lines and a charge of 30 to 45 cents a share on a discontinued automotive collectibles business.

Sales for the fourth quarter are expected to be flat with to below the comparable year-ago figure of $154 million. Analysts surveyed by Thomson Financial were looking for $169 million.

The company said zinc inflation is expected to result in lower profit margins during the fourth quarter of 2006 compared with the fourth quarter of 2005. Increased zinc costs will likely continue to negatively impact margins in the first half of 2007.

"We experienced lower than expected levels of reorders across all product categories in November and December and are disappointed with the current year fourth quarter sales results," RC2 said.

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