Monday August 30, 6:06 pm Eastern Time
U.S. Liquids issues profit warning amid FBI probe
HOUSTON, Aug 30 (Reuters) - U.S. Liquids Inc. (AMEX:USL - news) on Monday said it expected its 1999 third and fourth-quarter earnings to fall well short of analysts' current estimates, amid an FBI investigation alleging the company had illegally dumped hazardous material at its Detroit plant.
Recent FBI allegations have led to a temporary shutdown of the Detroit waste-treatment facility, which had been generating about 10 percent of U.S. Liquids' revenues, Chief Executive Mike Lawlor.
The Houston-based company said it now expected third-quarter earnings of 21 to 23 cents a share, well below First Call/Thomson Financial consensus estimates of 33 cents. For the fourth quarter, U.S. Liquids sees profits of 19 to 21 cents, far below the 36 cents analysts had forecast.
Revenues for the third quarter are expected to be in the $60-$61 million range, and for the fourth quarter in the $66-$67 million-range.
The company expects earnings for the year to come in at between $16 million and $17 million, or 97 to 99 cents per share, on revenues of $241 million to $242 million.
''We anticipate that the facts, when they are brought to light, will justify our faith in our policies and our personnel. We hope to reopen the Detroit facility within seven to 10 days,'' Lawlor said.
U.S. Liquids shares, listed on the American Stock Exchange, have been halted for trading since Aug. 25. On that day, the FBI started an investigation at the Detroit plant and another facility, under the U.S. Water Pollution Control Act, the Resource Conservation and Recovery Act and for wire and mail fraud.
The company was alleged to have discharged untreated liquid hazardous waste into the Detroit sewer system as well as to have transported such waste to a facility that did not have the proper permits.
In addition to losses at the Detroit facility, slower-than-expected revenues in its oilfield waste operations contributed to the lowering of the company's forecasts, Chief Financial Officer Earl Blackwell said.
He said U.S. Liquids expected the oilfield waste operations to improve next year because of increased drilling activity in the Gulf Coast region.
U.S. Liquids also said it was still interested in expanding through acquisition, and that certain negotiations are under way in that area.
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