Caltex Australia Ltd (CTX) fell by as much as 6.11% to $20.10 on Friday after it downgraded full year earnings guidance due to unfavourable currency movements and lower than expected production.
The petroleum distributor said it now expects the after tax profit in the range of $435 million to $460 million on a replacement cost of sales operating profit basis (RCOP).
Caltex uses RCOP to represent a more accurate appraisal of management's performance by adjusting for the impact of fluctuating crude oil prices.
The profit outlook range is lower than earlier guidance of $450 to $500 million.
"The profit outlook range is lower than that announced on 8 November 2007 as a result of the significant drop in value of the AUD against USD since 8 November, which resulted in lower than expected realised exchange gains on the payment of USD crude oil payables." Caltex said.
"In addition, lower than anticipated production has occurred as a result of unplanned refinery shutdowns in November and December."
Caltex said the expected profit equates to between 2.2 and 2.3 cents per litre on average for all petroleum products sold.
As opposed to the RCOP method of reporting, the historical cost profit basis includes inventory gains.
On this basis, , Caltex said it expects an after tax profit in the range of $640 million to $670 million for 2007 compared to $466 million for the full year 2006.
"The current year forecast includes inventory gains of $36 million after tax in approximately $204 million after tax compared to inventory gains of $36 million after tax in 2006 resulting from the rise in the price of crude oil.
More than 1.7 million shares have changed hands during intraday trading, up from daily average of 750,000.
Caltex dipped $1.31 to close at $20.10.
