Corporate: Tubi anticipates lower demand for its pipes will decimate earnings; shares fall 60 per cent
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Shares in Tubi (ASX:2BE) have plummeted this morning after the industrial pipe maker took an axe to its earnings outlook.
The company believes demand for its pipes in the North American petroleum sector is likely to decline, so it has adjusted plans for its industrial plants in Texas.
While the first plant is unaffected, the second will only start producing in Texas early next year. It was due to come online last week.
Plans for the third and fourth mobile plants have both been shelved for the time being, with orders for key components being cancelled or deferred.
Tubi told shareholders these decisions would ensure capacity was managed at reasonable levels. It said the moves were “prudent” and “in the best interests of the company”.
Tubi had forecast pre-tax earnings of $6.1m and statutory earnings of $9.5m. Now it anticipates these figures to be $1.8m and $100,000 respectively.
The company only listed in June at 20c and rose as high as 40c in July, never falling below 25c.
But today the blissful ride ended and it fell by as much as 60 per cent in the opening minutes of trading before recovering to 16c.
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