Yesterday afternoon, Barnes Group Inc. (NYSE: B) announced that it is withdrawing its 2009 earnings guidance thanks to uncertainty in the transportation sector. In May, Barnes forecast earnings of $1.20 to $1.35 per share -- better than the consensus estimate of $1.19 per share. Barnes did not update its estimate when making the announcement.
The company stated that problems in transportation sectors (like the automotive industry, which comprises one third of the company's revenue) have made predicting the rest of the year very difficult. Barnes' CEO Gregory Milzcik noted, "Challenging industry conditions, evidenced by customer plant closures, reduced customer production schedules, and overall uncertainty in the automotive market driven by bankruptcies and the cascading effect on suppliers, have obscured our visibility for the coming months."
The stock has rallied since early March, riding the support of its 10- and 20-day moving averages throughout. This support helped the stock topple potential resistance in the $16 region, which capped the shares back in January 2009. Barnes could find further support from its 10-week moving average, which it has cruised along since March as well. That said, the equity's 20-month moving average is descending into the picture and could provide a great deal of resistance in the $18 region.
The problem for the stock will be garnering momentum after this morning's announcement, as the shares have dropped in early trading. Perhaps the underlying levels of support will manage to step up and stop any prolonged slump.
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