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Pennzoil cuts profit target
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June 26, 2001: 5:55 p.m. ET
Automotive product maker cuts dividend, plans to restructure
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NEW YORK (CNNfn) - Pennzoil-Quaker State Co. said Tuesday that its second-quarter earnings will fall short of Wall Street forecasts and that it would restructure its business to enhance growth.
In addition, the Houston-based automotive product maker announced that its board of directors has reduced its quarterly dividend to 2.5 cents per share.
Pennzoil warned that it now expects second-quarter earnings to be between 13 to 15 cents per share. For the full year, the company said it would earn between 65 to 70 cents per share. Wall Street had expected Pennzoil-Quaker to earn between 29 to 33 cents per share with a consensus at 30 cents in the second quarter and 98 cents for the year, according to First Call.
The company blamed the industry-wide slowdown for its earnings revision.
"While the company has been executing well on its strategy to create one of the leading automotive consumer products powerhouses, we have been fighting an uphill battle against a very difficult macro environment," James J. Postl, president and chief executive officer of Pennzoil-Quaker, said in a statement.
Pennzoil-Quaker said it is taking the restructuring and dividend actions in response to continued weak demand for automotive consumer products, resulting from high gasoline prices, fewer miles being driven by motorists and the lingering effects from increased retail prices for motor oil.
Shares of Pennzoil-Quaker (PZL: Research, Estimates) ended Tuesday trading up 75 cents at $15.53. 
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