Shares of Delphi Financial drop on stock offering (AP)
Tue, 28 Apr 2009 16:20:08 Etc/GM
Delphi shares fell $2.25, or 12 percent, to $17.30 in afternoon trading.
The Wilmington, Del., company said Tuesday it was pricing its stock offering, announced Monday, at $17.50 per share. The offering will raise $60.4 million if underwriters exercise their 30-day option to buy an additional 450,000 shares.
Proceeds are expected to be used for general corporate purposes.
The company said the offering is in lieu of a $30 million continuous equity offering program it announced April 21. That equity offering will be terminated, Delphi said.
The slide in Delphi shares came even after FBR Capital Markets analyst Randy Binner upgraded the company to "Outperform."
In a note to investors, Binner wrote money raised from the stock offering, along with forecasted earnings, positions Delphi to absorb credit losses in 2009 and 2010. He raised the price target on the company $7, to $26 per share.
At the same time, he lowered the 2009 earnings per share to $3.13 from $3.20. The forecast for 2010 was lowered to $3.31 from $3.45 per share.
Analysts surveyed by Thomson Reuters on average forecast earnings per share of $3.23 this year and $3.62 next year.
source: http://biz.yahoo.com/ap/090428/delphi_financial_mover.html?.v=1