RPT-UPDATE 1-Mueller Water shares fall on govt spending worries
* Q1 loss/shr $0.06 vs est loss/shr $0.05
* Sees higher scrap metal prices in Q2
* Says spending by municipalities has slowed
* Shares down 15 pct (Adds conference call details; analyst comments)
By Divya Sharma
BANGALORE, Feb 2 (Reuters) - Shares of Mueller Water Products Inc (MWA.N) fell 15 percent on Wednesday, a day after the company said it remained cautious on its near-term outlook due to rising raw material costs and uncertainty in its municipal market.
"Spending growth on water infrastructure by municipalities appears to have slowed ... due to perceived uncertainty around both funding availability and financing costs," Chief Executive Gregory Hyland said on a call with analysts.
Analyst Anthony Fritz of Gabelli & Co said weakness in Mueller's key municipal markets could affect demand in the second half of the year.
The price of scrap metal -- one of the company's key raw materials -- would be higher in the second quarter, Mueller said on the call.
Its products include fire hydrants, pipe fittings and water meters.
Shares of the Atlanta-based company were down 10 percent at $3.96 in late morning trade on the New York Stock Exchange in heavy trade. They touched a near 2-month low of $3.73 earlier.
The stock had closed 10 percent up on Tuesday before the company reported its quarterly results. (Reporting by Divya Sharma in Bangalore; Editing by Gopakumar Warrier, Unnikrishnan Nair)
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