Employee Solutions Delays Fourth-Quarter Reports

Employee Solutions Inc. shares collapsed in fevered trading after the worker management company delayed reporting its fourth-quarter results and told investors profits will fall below expectations.

Shares sank $9.12-1/2, or 59 percent, to $6.25 Friday after falling 23 percent Thursday on concern it would report disappointing earnings. More than 30.1 million shares exchanged hands.

“We don’t wait around for the news,” said William “Beau” Duncan, chairman of Duncan-Hurst Capital Management, which oversees more than $2 billion.

Duncan-Hurst owned 237,540 shares of Employee Solutions at the end of last year, though that position was down from almost 1 million shares in September. “They could halt the stock, and then your money could be locked up.”

Before trading began, Employee Solutions said its earnings wouldn’t meet expectations, and that it didn’t know when it would release its quarterly and full-year reports.

Prior to its unraveling in the past couple weeks, Employee Solutions was a stellar performer, rising 1,161 percent in the two years leading up to its peak on Feb. 21.

Nathan Buell, head of investor relations, wouldn’t rule out the possibility of Employee Solutions restating its earnings from previous quarters.

Earnings were delayed, Buell said, “because of issues that have not been resolved.” He wouldn’t elaborate further.

A beneficiary of the outsourcing trend by U.S. companies this decade, staff leasers like Employee Solutions, who are also known as professional employer organizations, take responsibility for companies’ workers, paying their salaries and benefits.

Unlike temporary employment organizations, the workers covered by Employee Solutions continue to work for the companies that hired them.

Other stocks that traded heavily or moved substantially Friday:

NYSE

Vanstar, down $4.12-1/2 at $9.62-1/2.

The Pleasanton, Calif.-based computer-services provider said its fiscal fourth-quarter earnings would be below Wall Street’s estimates. Vanstar cited higher-than-expected selling, general and administrative expenses.

Fluor, down $6.75 at $57.75.

Smith Barney and Oppenheimer downgraded their investment ratings on the Irvine, Calif.-based construction and engineering company, the Dow Jones News Service reported.

Shoney’s, down 87-1/2 cents at $6.

The Nashville, Tenn.-based restaurant chain lost 28 cents a share in the first quarter, below analysts’ estimates.

NASDAQ

Oracle, up $4.87-1/2 at $41.

The world’s second-largest software company said late Thursday that strong demand lifted profits for its latest quarter by 16 percent after costs to acquire another software developer earlier in the year.

Family Golf Centers, down $5.50 at $20.50.

The Melville, N.Y.-based operator of golf properties earned 4 cents a share in the fourth quarter, below analysts’ estimates.

Premisys Communications, down $3.18-3/4 at $8.06-1/4.

The Fremont, Calif.-based company said it expects to post a third-quarter loss that’s wider than analysts are forecasting. Premisys manufactures and markets access products for telecommunications service providers.

Ancor Communications, down $1.75 at $4.12-1/2.

The maker of computer-networking products said its auditor’s report raised questions about Ancor’s ability to continue as a going concern. Ancor, of Minneapolis, said in response it is planning to issue $10 million in convertible preferred shares. It will use the funds for product development and marketing.