PIA’s Stock Price Declines 34% After Analyst’s Remarks

Shares in PIA Merchandising Services Inc. tumbled nearly 34% Tuesday to close at $17.25 a share in Nasdaq trading, dropping $8.75 after a Wall Street analyst cut his earnings estimate for the company.

Executives at PIA Merchandising weren’t available Tuesday, but retail industry observers said the company hadn’t reported any significant news in recent days.

Jack Clark, an analyst with Furman Selz Inc., a New York investment house, cut his profit outlook on PIA to 55 cents a share from 85 cents, the firm said in a research note.

Clarke said the firm’s previous estimate assumed $13 million of profitable new business in 1996. With almost half of the year complete, the investment firm said, there has been no meaningful new business. The firm cited, among other things, a more challenging pricing environment that developed over the past 90 days.

Furman and PaineWebber Inc. were underwriters on PIA’s initial public offering on March 1.

PIA shares fell by as much as $9 on Tuesday to $17 before rebounding slightly. Trading topped 1.3 million shares, with more than 12 times the normal number of shares changing hands.

Prior to Tuesday’s drop, PIA’s stock had risen to a high of $28.375 on May 17. The stock began trading March 1 at $14.50.

PIA Merchandising represents manufacturers of goods sold in retail grocery stores. The company’s employees check retailers to ensure that merchandise is displayed properly.

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PIA in a Slide

PIA Merchandising Services Inc. stock took a huge hit during the long weekend, losing 35% of its value from Friday’s closing price to open at $17 Tuesday. A morning rally recouped about half that loss, but the stock settled to close near that opening mark. Here’s Tuesday’s hourly ride:

Friday close: $26.00

esday open: $17.00

10 a.m.: $18.00

11:04: $21.00

11:25: $21.50*

Noon: $21.00

1:02 p.m.: $20.50

2:02: $20.25

3:00: $18.25

Close: $17.25

* Daily high

Source: Bloomberg News Service