Columbia-based General Physics Corp. expects its second-quarter...


Columbia-based General Physics Corp. expects its second-quarter earnings to be "significantly lower" than expected because of delays in new contracts and continued high overhead costs.

Analysts had been projecting earnings of 24 cents to 27 cents a share for the quarter.

The announcement, made late Thursday, sent the company's stock into a tailspin yesterday. Shares of General Physics dropped nearly 36 percent to close at $5.875 on the New York Stock Exchange, down $3.25 for the day. The stock had closed Thursday down 12.5 cents at $9.125.

The company declined to offer any indication of how much it will earn in the second quarter.

It was the second consecutive quarter in which General Physics announced that earnings would be lower than expected. In March, it said first-quarter earnings would be about half the 22 cents that analysts were predicting. A few weeks later, it reported a profit of 10 cents a share on sales of $19.3 million.

As was the case in the first quarter, General Physics said second-quarter profits would be lower as a result of further delays in the awards of government contracts.

John McAuliffe, chief financial officer, said that most contracts eventually come through.

Mr. McAuliffe said the cost of retaining the employees needed to perform work on the contracts also cut profits. He said a $13.6 million contract and several smaller ones were delayed, but he declined to identify the federal agencies involved.

General Physics does a lot of work for the Department of Energy, including the training of personnel to operate nuclear power plants and writing maintenance publications for the upkeep of these plants.

Mark A. Friedman, who follows General Physics for Goldman Sachs & Co. in New York, said he had projected that the company would earn 26 cents a share in the second quarter. He said he had reduced his estimate but declined to offer a new one.

For the year, Mr. Friedman said, he expects General Physics to earn about 65 cents a share, but he said that could change. "I'm still finalizing my estimate," he said.

zTCHD: General Physics stumbles on word of lower earnings

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