Shares of exercise-machine pusher


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plunged 38% Wednesday morning after the company warned investors that it won't be able to keep up with Wall Street's growth expectations.

The company, which sells Bowflex home fitness machines, posted solid third-quarter results Tuesday night, saying earnings rose 49% to $25 million on a 72% revenue gain, to $153 million. Per-share earnings jumped to 71 cents a share in the latest period from 46 cents a year earlier.

But investors who bought into the stock because of its strong growth fled Wednesday morning after Nautilus made cautionary comments about coming periods. "As we move forward, we are seeing cautious consumer spending, a decline in overall consumer confidence and higher advertising rates," CEO Brian Cook said in a press release. "Assuming these trends continue into 2003, we would expect to see substantially slower sales growth next year while continuing to generate profits comparable to 2002."

That forecast marks a sharp pullback from what Wall Street has been expecting. Analysts surveyed by Thomson Financial/First Call had projected 20% profit and revenue growth for 2003. The stock slid $8.76 to $15.09 in Wednesday morning trading.

Not everyone was surprised by the company's change of tune.'s

Herb Greenberg has long reported

the short case on Nautilus, which includes the mounting odds against the company maintaining its breakneck pace as well as inconsistencies in Nautilus' financial reporting.