Pacific Scientific Soothes Investors : Stock prices: After company says it doesn’t know why shares have been declining and calls outlook ‘very promising,’ they go back up by $1.
Pacific Scientific Co., a maker of aircraft safety equipment, sought to reassure investors Tuesday by saying it knows of no reason why its stock price should be dropping.
It worked, at least on Tuesday: After the company released its statement, the stock rose $1 to $13.50.
The company, whose shares have sold for as much as $16 on the New York Stock Exchange in the last year, dropped from the $15 range in mid-April to $12.50 Monday after a major shareholder disclosed that it had sold a large chunk of stock.
The Tuesday statement said Pacific Scientific “is not aware of any development within its business which would account for the recent decline in the price of its common stock.”
Chairman Edgar S. Brower said in the statement that the company expects strong sales for the second quarter.
In fact, said Brower, “we are very positive concerning the outlook for the company’s business for the balance of the fiscal year.”
Pacific Scientific in February reported disappointing results for 1992: Earnings fell to $5.4 million from $8 million in 1991 after what the company described as “a year of difficult economic conditions.”
In April, Pacific Scientific reported a first-quarter profit of $2.2 million, double the $1.1 million posted the year before.
But sales were flat at around $41 million and all the increase in profit--the company said--came from an accounting change.
New York investment adviser Shufro, Rose & Ehrman disclosed Friday that it was continuing to sell Pacific Scientific stock and that it had sold 95,000 shares in April at between $14 and $15.50 a share. (It still holds 320,000 shares, or 6% of the 5.3 million shares outstanding.)
A company spokesman said Tuesday that it was those sales that had pushed the stock price down.
In addition to aircraft safety equipment, the company makes electrical and electronic equipment and motors and generators for factory and office automation, aircraft, electric utilities, microchip manufacturers and drug companies.
