First Niagara Plunges Most Since 2008 on Lower Forecast
First Niagara Financial Group Inc. (FNFG) plunged the most since the financial crisis after forecasting 2014 earnings will be less than some Wall Street estimates.
The stock dropped 12 percent to $9.08 at 4:05 p.m. in New York for its biggest slide since December 2008. It was the day’s biggest decliner in the KBW Bank Index and the loss left First Niagara down almost 15 percent for the year, the worst in the 24-company benchmark.
While fourth-quarter profit increased 27 percent to $77.7 million, the Buffalo-based company said operating income for 2014 will be 72 cents to 75 cents a share. Analysts surveyed by Bloomberg were counting on an average of 79 cents.
“First Niagara is solid at its core, but we’ve been underperforming,” Chief Executive Officer Gary Crosby told analysts on a conference call. Expenses probably will rise, reflecting “a combination of higher staffing to execute projects and to operate the new product and service platforms, as well as higher technology and depreciation expenses and professional fees.”
The spending will lead to better revenue in future years, he said. Crosby was named interim CEO in March and took the post permanently in December.
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