Dan River rating reinforced
June 20, 2002-- Home Textiles Today,
Charlotte, NC — Citing increased demand through the first five months of the year for Dan River products and stepped-up production following an inventory workdown, Wachovia Securities has reiterated its "buy" rating on Dan River bonds and increased its earnings estimate for the textiles producer.
A better-than-expected first-quarter performance, fueled by strong margin improvement and plants running at or near capacity, have improved the company's outlook and financial condition, said Jeffrey Stewart, a high-yield analyst for Wachovia and a long-time textiles stock watcher, in a research note to investors.
With demand increasing, said Stewart, Dan River's home fashions and apparel fabrics plants ran at or near capacity during the first quarter, compared with 83 percent in home fashions plants a year ago and just 66 percent in the company's apparel fabrics plants.
Because of the company's "dramatically changed outlook," Stewart said he's now forecasting sales of $160 million for the second quarter, roughly unchanged from last year, and an improvement over a 3.4 percent drop in the first quarter. For all of this year, Stewart projected sales of $650 to $670 million, about flat with last year.
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