Earnings Warning Puts HRH Stock In Slide
By Mark E. Ruquet
NU Online News Service, Feb. 12, 4:12 p.m. EST?An earnings warning from Hilb, Rogal and Hamilton put its stock on the skids as shares tumbled more than 15 percent by noon time.
During an investor's conference call, Caroline Jones, HRH's chief financial officer, said that while the firm is comfortable with the consensus earnings of $2.21 per share for the year, the firm felt that "the earnings growth rate for the first quarter of 2003 would be lower than the remainder of the year," adding that consensus earnings for that period were too high.
She said earnings would be affected by Hobbs Group, LLC of Atlanta, which historically has a weak first quarter, and the loss of a large account would carry over into the first quarter of 2003.
Martin L. "Mell" Vaughan III, president and chief operating officer, said the adjustment in the guidance resulted from the loss of a $1.1 million power generating account in Latin American, difficulty finding capacity for clients to place their transportation accounts, and a "culling of producers" who did not meet production expectations.
Despite reporting net income increase of 129 percent for the fourth quarter, and 101 percent increase for the year, at 1:30 p.m. the company stock was down $5.99 to $31.04 a share.
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