Flir Drops 2.7% in 90 Minutes Prior to Cutting Estimate
Flir Systems Inc. (FLIR) declined 2.7 percent in the last 90 minutes of trading yesterday, sending the stock to the biggest intraday retreat in almost three months just before the company cut its earnings estimate.
The maker of night-vision cameras fell as low as $18.19 in the last half hour from $18.70 at 2:30 p.m. New York time. The loss for the day reached 3.1 percent, the biggest intraday slump since April 27. Nine minutes after the market’s close, the company lowered its 2012 forecasts.
“It would almost certainly seem suspicious,” Mark Turner, head of U.S. sales trading at New York-based Instinet Inc., which accounts for almost 5 percent of daily U.S. equities volume, said in an e-mail. “While we have no evidence or inside knowledge, it would have appeared that the guidance news could have been leaked.”
The profit warning from Flir comes at the start of the second-quarter earnings season with more than half of Standard & Poor’s 500 Index companies scheduled to report results in the next two weeks. Shares of the Wilsonville, Oregon-based manufacturer have tumbled 51 percent since reaching a three-year high of $37.04 in May 2011.
Flir’s Chief Financial Officer Tony Trunzo declined to comment on the stock’s trading. Wayne Lee and Robert Madden, spokesmen at Nasdaq OMX Group Inc., didn’t respond to phone calls and e-mails seeking comment.
Flir said weak demand for products used in building maintenance and recreational marine products such as night- vision equipment used by operators of yachts, particularly in Europe, hurt second-quarter sales and profit.
The company cut its 2012 sales projection to a range of $1.4 billion to $1.5 billion, compared with an April forecast of at least $1.55 billion. Profit will be $1.40 to $1.50 a share, compared with the earlier estimate of at least $1.60, Flir said. Analysts, on average, expect full-year profit of $1.63 a share on sales of $1.55 billion, according to data compiled by Bloomberg prior to the announcement.
The stock fell 2.3 percent, or 44 cents, to $18.33 yesterday in regular trading before being halted on the Nasdaq Stock Market. Flir lost 1.3 percent to $18.10 at 10:26 a.m. New York time today.
James Ricchiuti, a New York-based analyst at Needham & Co., said the announcement wasn’t surprising based on the prospects for weaker earnings. He has a hold rating on Flir.
“The stock was down 44 cents,” he said in a telephone interview. “I don’t think that was all that much. It came with the market move.”
The S&P 500 (SPX) declined 0.2 percent yesterday after the International Monetary Fund cut its global economic forecast and U.S. retail sales unexpectedly fell. The index retreated less than 0.1 percent to 1,352.81 today after Federal Reserve Chairman Ben S. Bernanke said progress in reducing unemployment is likely to be “frustratingly slow.”
Flir last year cut its annual profit forecast on July 22 before the market opened and the stock climbed 0.3 percent during the day.
“I don’t think it was predictable that they would lower it specifically today,” Jonathan Ho, a Chicago-based analyst at William Blair & Co. said in an e-mail. “It was somewhat expected as investor sentiment had been that they would revise it lower given the headwinds they faced in both their businesses.”
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