Advanced Marketing Services shares dropped $3.75 to...

Advanced Marketing Services shares dropped $3.75 to close at $11 per share in over-the-counter trading Friday after the company announced that it expects to report “substantially lower earnings” for the first quarter ending June 30.

The San Diego-based distributor of books to discount warehouse chains, including Price Co., said earnings for the first quarter will be less than the $530,000, or 11 cents per share, reported for the same period last year. Sales will increase only 13% to 17% from the $25.6 million reported in the same period last year.

If the results come in as expected, the quarter will be the second straight down quarter in terms of earnings per share for Advanced Marketing Services. For the fourth quarter ended March 31, earnings per share were 10 cents, contrasted with 11 cents for the year-ago quarter. Sales increased less than 10%.

The reduced-earnings outlook is caused primarily by a weakness in retail book sales, an industrywide phenomenon, the company said in a statement.