Spectrum Brands, Inc. (SPC)

Last Trade:	8.67
Trade Time:	Feb 9
Change:	1.22 (12.34%)

Shares of Spectrum Brands Inc. slid for their second day Friday amid an analyst downgrade and a credit rating cut due to the battery and personal product maker's disappointing fiscal first-quarter performance.

Early Thursday, the maker of Rayovac batteries said it swung to a quarterly loss due to restructuring charges and increased advertising spending, sending shares down 15 percent by the market close.

Ratings agency Standard & Poor's cut its rating on the company Friday, citing weak operating performance, intense competition in its battery business and higher commodity costs.

The lackluster first quarter prompted Prudential Equity Group analyst Constance Maneaty to lower her rating on the stock to "Underweight" from "Neutral Weight" on deteriorating fundamentals. "The base business results seem to have worsened, and the only growth we are attributing to the business in fiscal year 2008 is cost savings," she said.

Although Spectrum is planning a sale of its lawn and garden division, Maneaty said the divestiture will not give enough of a boost to the company's balance sheet. The analyst said she is looking for Spectrum to start the process of selling a second asset, possibly its battery business, during this fiscal year.

Deutsche Bank analyst Bill Schmitz Jr., however, said he thinks the market's reaction to the company's first quarter results is "overdone" and that shedding assets could help put Spectrum back on the right track.

"While outlook for 2007 is bleak and it will clearly be a rebuilding year, we believe there is still a solid opportunity to downsize the business (and) drive ongoing restructuring savings as assets are shuttered," Schmitz said in a note to investors.

Spectrum shares fell 87 cents, or 8.8 percent, to $9.02 in heavy afternoon trading on the New York Stock Exchange.

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