West Marine Falls on Lackluster Outlook

On Wednesday, the boating supplies and accessories retailer predicted full-year earnings in a range of 2 cents to 9 cents per share. Analysts surveyed by Thomson Financial expect net income of 22 cents per share.

The Watsonville, Calif.-based West Marine also reported that its fourth-quarter loss widened to $65.7 million, or $3 per share, compared with a loss of $12.8 million, or 60 cents per share, in the same quarter a year before as consumers cut back spending. Analysts predicted a quarterly loss of 59 cents per share.

The latest quarter's loss included special charges, including $2.25 per share related to an assessment of goodwill.

The boating sector, along with many other groups, has struggled as consumers curb spending due to rising gas costs, the ongoing housing downturn, diminishing credit and recession fears.

Jeffrey Blaeser of Morgan Joseph & Co. predicted that the sector will continue to experience softness this year due to curbed consumer spending. However, the analyst said in a client note that West Marine has been able to generate solid free cash flow and keep a healthy balance sheet, which should enable it "to ride out the storm."

Blaeser reiterated a "Hold" rating.

Shares of West Marine fell 95 cents, or 11.7 percent, to $7.16 in morning trading. The stock has traded between $6.20 and $18.38 over the past 52 weeks.