Environmental Elements' shares dip, rebound

October 04, 1991|By Timothy J. Mullaney

Shares of Environmental Elements Corp. stock yesterday continued a roller-coaster ride that started when a Wall Street analyst decided Wednesday to slash his estimates of the Baltimore pollution-control company's likely fiscal 1992 earnings.

The stock closed yesterday at $14.50 a share, up 75 cents, after trading as high as $15.75 a share. On Wednesday, the stock fell 4 points in the last half-hour of trading after Richard J. Sweetnam Jr., a Kidder, Peabody & Co. analyst, said that he believed the company would earn only 35 cents a share for the fiscal year that ends March 31, 1992. Earlier, he had said Environmental Elements would earn 52 cents a share from continuing operations. Mr. Sweetnam could not be reached yesterday for comment.

The company earned $1.01 a share in fiscal 1991.

"We were up a quarter at 3:30 [p.m. Wednesday], and at 4 p.m. we were down three and three-quarters," said John S. Lalley Jr., director of communications for Environmental Elements, which makes air pollution-control devices. He said the company didn't know of Mr. Sweetnam's decision until the stock dropped.

Mr. Lalley said Environmental Elements had told analysts that Mr. Sweetnam's earlier estimate was likely to prove too high, but didn't tell Kidder, Peabody what the earnings might be. Many companies do not give specific earnings estimates but guide analysts by telling them their estimates are too high or too low.

Mr. Lalley said that Environmental Elements' earnings will fall because the recession has slowed orders. The equipment the company makes is very expensive, and utilities are trying to delay major capital spending decisions, he said.

Environmental Elements said Kidder, Peabody changed its estimate again yesterday, to a range of 40 cents to 45 cents a share. F. Bradford Smith, president of Environmental Elements, said the company thinks it will top that estimate.

Mr. Lalley said the flap resulted from a communication problem between the company and Kidder, Peabody. "He got the message [about the earnings guidance the company was giving analysts] thirdhand, and that was part of the problem," he said.

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