UPDATE 2-Blount sees weak '09 revenue, shares fall

Tue Mar 3, 2009 1:23pm EST

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* Q4 EPS $0.14 vs $0.37 year ago

* Rev up 1.5 pct

* Sees FY09 rev below Street view

* Shares fall 33 pct (Adds details, analyst comments, share movement)

March 3 (Reuters) - Blount International Inc (BLT.N) reported a lower fourth-quarter net profit, hurt by a drop in international sales and higher steel costs, and forecast 2009 revenue below market expectations, sending its shares down to a six-year low.

Shares of Blount, which makes outdoor products and industrial and power equipment, were down $2.40 at $4.80 in afternoon trade on the New York Stock Exchange. They hit a low of $4.62 earlier in the session.

Blount, which expects comparable unit volumes to decline in the first half of 2009, said international and original equipment manufacturer(OEM) customers continue to be impacted by the strong U.S. dollar and the economy, and have remained cautious about inventory levels as they entered 2009.

For 2009, the company sees sales of $510 million to $560 million. Analysts on average were expecting $647 million, according to Reuters Estimates.

The market has been taken by surprise by the material shift in guidance, particularly when investors are expecting the company to see some benefits from the acquisition of Carlton, analyst Mark Rupe of Longbow Research said. In May 2008, Blount said it acquired Carlton Holdings Inc, a Oregon-based saw chain manufacturer, for $63 million. The acquisition was intended to boost Blount's core business -- the outdoor products segment.

Blount's outdoor products segment makes cutting chain, bars, lawnmower blades and accessories for yard care equipment.

Rupe, who has a "buy" rating on the stock, said Blount's business has historically been stable since it is replacement driven.

Europe accounts for about 33 percent of the company's business, he said.

NET INCOME FALLS

Blount said it had initiated closure of a manufacturing facility, cut about 8 percent of jobs globally and frozen certain salaries to date.

For the fourth quarter, net income fell to $7.0 million, or 14 cents a share, from $17.6 million, or 37 cents a share, a year earlier.

A higher effective income tax rate in the fourth quarter reduced net income by 6 cents a share, the company said.

Sales of the Portland, Oregon-based company rose to $133.8 million from $131.8 million in the year-ago period.

Steel costs were about $4.2 million higher compared with the year-ago quarter.

Analysts on average were expecting earnings of 18 cents a share, before special items, on revenue of $152.4 million. (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Himani Sarkar, Anil D'Silva)

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