NEW YORK - NCI Building Systems Inc. stock plummeted Wednesday after an analyst slashed her earnings estimate and expressed concern about share price dilution from a possible equity investment in the struggling building components maker.
The Houston company, which posted second-quarter results Tuesday beneath Wall Street expectations, said its commercial and industrial business was down about 60 percent in the quarter, and competition has been whittling prices, by more than 50 percent in the last eight months.
"To date, we have not seen any indication of a pickup in demand," Chief Executive Norman C. Chambers said in a statement. "While there is some anecdotal evidence of increased activity due to seasonal factors, there is no discernible trend to report."
NCI also repeated an earlier statement that it was seeking easier loan terms and fresh equity financing as well as warning that any such equity investment would be "very dilutive" to current shareholders.
UBS analyst Timna Tanners on Wednesday cut her estimate of third-quarter results from a profit of 1 cent to a loss of 27 cents. Analysts polled by Thomson Reuters expect, on average, a profit of 29 cents.
Besides collapsing demand and falling prices, Tanners cited concerns about the effect on the stock price of an expected private equity stake in the company.
"Without knowing the extent of the dilution it is difficult to evaluate the share price, in our view," said Tanners, who cut her price target to $4.50 from $6.50 and reiterated his "Neutral" rating on the stock.
In midday trading, NCI fell 98 cents, or 22.9 percent, to $3.30. In the last 52 weeks the stock has ranged from $1.76 to $40.95.
Funny thing is she wasn't even in the Q2 conference call...she had some inexprienced underling fill in for her....two days later she says she can't evaluate the company's value...maybe if she had joined the call she could have.