By  on March 9, 2007

Quiksilver Inc. reported a steep drop in first-quarter profit because of unseasonably warm weather and lowered earnings guidance for fiscal 2007.

The Huntington Beach, Calif.-based action sports apparel company said Thursday that net income for the quarter was $2.5 million, or 2 cents per diluted share, compared with $18.6 million, or 15 cents per diluted share, in the year-ago period.

Quiksilver said it expected earnings of about 53 cents per diluted share for fiscal 2007. In February, the company forecast earnings of 75 cents to 78 cents per diluted share, an outlook that had been reduced from 88 cents to 92 cents.

The company estimated revenue of $2.45 billion for the year, compared with a previous forecast of $2.5 billion.

"We're obviously extremely disappointed in today's guidance revision," chairman and chief executive officer Robert B. McKnight Jr. said on a conference call. I think anyone in the snow industry can tell you that this was the worst [snow] season in the past several decades."

McKnight said the company was experiencing substantial markdowns and a reduction in orders for next season.

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