Newspaper article The Florida Times Union

Metris' Earnings Fail to Impress Some

Newspaper article The Florida Times Union

Metris' Earnings Fail to Impress Some

Article excerpt

Byline: Mark Basch, Times-Union business writer

Metris Cos. Inc. two weeks ago reported a 46 percent increase in fourth-quarter earnings. But in a weak economy, investors are not impressed with the Minnesota-based credit card issuer, which has a customer service center in Jacksonville.

Concern about rising consumer defaults on credit cards has sent Metris' stock in a free-fall for the last six months, from a high of $39.10 in July to a three-year low of $12.15 last week.

Several analysts downgraded the stock after the company's Jan. 16 earnings report, when Metris said its percentage of delinquent accounts was 9.4 percent as of Dec. 31, up from 8.9 percent on Sept. 30 and 8.3 percent on Dec. 31, 2000.

In addition to those credit quality worries, an article in last week's Barron's newspaper revealed that hedge fund manager James Chanos has been short-selling Metris stock. When investors short a stock, they are betting that the price of the stock will fall.

Chanos gained some notoriety by shorting Enron Corp. stock in late 2000, well before most people saw Enron's collapse coming. So he has some credibility as a short-seller, and the Barron's story helped send Metris lower last week.

But not all analysts are down on Metris for the long term. "I think this is a pure play on the economy," said Jack Ablin, chief investment officer at Harris Private Bank.

Ablin thinks the company is basically sound, and Metris' stock price should improve when the economy does.

A POOR SLICE OF PIE

Flowers Foods Inc. dropped $3.75 to $25 last Thursday after it reported fourth-quarter earnings sharply below analysts' forecasts.

The Thomasville, Ga.-based bakery products company had earnings from operations of about 11 cents a share, well below the consensus forecast of 28 cents by analysts surveyed by First Call Corp. …

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