York to shut 3 plants overseas

1,200 jobs being cut

3rd-quarter earnings won't meet estimates

October 02, 1999|By BLOOMBERG NEWS

YORK, Pa. -- York International Corp., the world's largest industrial-refrigeration company, said yesterday that it will shut three European plants and cut 1,200 jobs, and it warned that third-quarter earnings will fall short of estimates because of weaker sales in Latin America and the integration of an acquisition.

York said it will earn 65 cents to 70 cents a share in the third quarter. It was expected to earn 95 cents, the average estimate of three analysts surveyed by First Call.

Fourth-quarter earnings will also be below forecasts, the company said.

York acquired Sabroe AS, a Danish supplier of refrigeration systems, in June. The integration of the business resulted in inefficiencies that hurt earnings, York said. The devaluation of the Brazilian currency also reduced revenues from Latin America as the company sold fewer products and had to cut prices.

Shares of York fell $11.6875, or 33 percent, to $24.25 in trading of 4.3 million, more than 27 times its three-month daily average.

For the fourth quarter, earnings will be slightly above the 81 cents a share posted in the year-earlier period, the company said. It will take charges of $40 million in the third quarter and as much as $20 million in the fourth quarter.

York also said it sold its energy-services business, Viron Corp., to CMS Energy Corp. of Dearborn, Mich. The price was not disclosed, though York said it will have a pretax gain of about $10 million from the sale. York said it sold Viron because it did not fit with its main businesses of heating, air conditioning and refrigeration.

CMS owns Consumer Energy, a utility serving about 1.5 million natural-gas and electric customers in Michigan. Viron is based in Kansas City, Mo., has $80 million in sales and 148 employees at 22 offices. CMS said the purchase adds electric and gas commodity procurement to its energy-services business.

Shares of CMS fell 25 cents to $33.6875.

York will close two plants in Denmark and one in Sweden. It expects to save $60 million next year as a result of the plant closings, layoffs and other savings resulting from the Sabroe purchase.

York had $3.29 billion in sales last year and has 25,000 employees.

Its shares have fallen 41 percent this year.

Pub Date: 10/02/99

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