Cintas Corp.'s (CTAS) worries about a slow recovery in U.S. jobs
spurred it to give downbeat guidance for its fiscal second
half.
Shares were down 2.6% at $23.95 premarket. The stock, which hit
an 11-year low in March, was up about 7% from a year earlier
through Friday.
Although the U.S. unemployment rate unexpectedly declined in
January, suggesting the labor market may be coming out of its worst
downturn in decades, Cintas Chief Executive Scott D. Farmer said
Tuesday the company "continued to expect a very slow recovery."
Cintas' profit has deflated during the recession as high
unemployment and the weak economy continue to hurt demand for
uniforms and other business supplies. The company has cut jobs and
other costs to cope.
The company projects third-quarter earnings of 29 cents to 31
cents a share while the fourth-quarter profit is seen at 30 cents
to 34 cents. The average estimates of analysts surveyed by Thomson
Reuters were 37 cents and 41 cents, respectively. Cintas' revenue
targets bracketed analysts' expectations, which were nonetheless at
the high end of the company's outlook.
Despite the pessimistic outlook, Farmer said Cintas is
"enthusiastic" about its future opportunities.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com