Last Call: AbitibiBowater slips after Citi cuts '08 view

Shares of AbitibiBowater Inc. fell on Tuesday after a Citi Investment Research analyst cut earnings estimates for the pulp and paper products maker, citing higher expected costs.

AbitibiBowater shares dropped 56 cents, or 5.7 percent, to $9.34 in late afternoon trading.

Chip Dillon widened his 2008 loss forecast for the Montreal-based company to $4.30 per share from a projected loss of $3.40 per share. Analysts polled by Thomson Financial expect a 2008 loss of $5.90 per share, on average.

Dillon attributed the wider loss estimate to higher costs and bigger-than-projected losses in its lumber segment.

In addition, last month's $350 million placement of private debentures with Fairfax Financial Holdings Ltd. added 60 percent more shares and will prove dilutive for the stock, he said.

However, Dillon was pleased that the company raised $1.16 billion between March and early April, and said it appears that an earlier refinancing plan is removing it from a credit freeze.

The analyst maintained his "Buy/Speculative" rating and his $37 price target on the company, meaning he expects the stock to more than triple in value in the next 12 months.

Shares of AbitibiBowater are off about 75 percent from their annual high of $37.45 in October.