Guitar Center’s Profit to Miss Estimates

Guitar Center Inc., the world’s largest musical instrument retailer, said second-quarter earnings will be 8 cents lower than forecast because of slow sales and the effect of a recent acquisition. Shares of the Agoura Hills-based company plunged $4.13, or 27%, to close at $10.94 in heavy trading on Nasdaq. Although analysts expected lower earnings from Guitar Center’s $48.3-million purchase of Musician’s Friend, sluggish sales of the company’s professional audio equipment, such as keyboards and recording and public address systems, came as a surprise. Analysts had expected Guitar Center to earn about 19 cents per share in the second quarter. Guitar Center had 1998 sales of $391.7 million. Its shares have fallen 67% since reaching a 52-week high of $32.75 in July.