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Thomas & Betts tumbles on 2Q warning

    Thomas & Betts (NYSE: TNB) fell 29 percent Tuesday after it said second quarter earnings will be significantly below the current analyst consensus of 74 cents a share.

    Shares were down 7 5/8 to 18 3/8.

    The earnings are excluding an anticipated gain on the sale of the company's electronics OEM business. The company said the expected earnings decrease will primarily result from a likely increase in provisions for sales and accounts receivable deductions.

    "We face ongoing issues integrating our business processes and accounting functions into our comprehensive information systems, which we have been in the process of upgrading for the past two years," said chairman, CEO and president, Clyde R. Moore in a statement.

    Thomas & Betts said that the sale of its electronics OEM business to Tyco International and that the sale is now scheduled to close by the end of June. Proceeds from the sale will be used primarily to pay down debt. The company also said it expects to use some of the proceeds to buy back stock.

    Plans to improve business include new processes and controls to address accounts receivables, inventory, and other functions. The company has hired outside consultants to expedite this program but said considerable work remains.

    The company also announced organizational changes, including the establishment of a new position of chief operating officer. It plans to redefine its strategies to focus on its core electrical and communications products and markets, continuing to divest additional businesses that do not fit the company's redefined strategy. The company expects to sell its Aster(TM) product line and a substantial portion of its data comm product lines in the near future. It also plans to leveraging distribution strengths to pursue opportunities in B2B e-commerce.

    The company's top competitors include Siemens AG and Tyco International, according to Hoover's Online.