CALIFORNIA : SOUTHLAND FOCUS : Maxwell Technologies Shares Fall 35%

Maxwell Technologies Inc. shares fell 35% after the maker of technology for sterilizing medical devices and purifying water said increased spending will reduce earnings in the first half of fiscal 2000. Maxwell shares fell $6.88 to close at $12.69 on Nasdaq. The stock had the third-biggest percentage drop on U.S. exchanges. San Diego-based Maxwell also makes large computer systems that help run telephone systems and factories. The added spending will go toward medical sterilization, water purification, ultracapacitor and space product development, the company said. While the investments are expected to reduce earnings in the first two quarters, earnings for the year ending next July will be slightly higher than 1999’s. Profits are expected to increase in the second half of the year. Maxwell said this isn’t a reflection on sales. “We expect double-digit revenue growth in fiscal 2000,” spokesman Michael Sund said. Maxwell also makes products used to build satellites. For the 1999 fiscal year ended July 31, the company reported net income of $11.1 million, or $1.12 a share, on sales of $179.7 million. “This is a company we have long-term faith in, but operating results in the July quarter were disappointing and the change in guidance is drastic,” said Joseph Arsenio, an analyst with Hambrecht & Quist Group.