ExpressJet shares plunge on regional jet deferral = = = = Thursday February 13, 5:54 PM EST = (Updates with closing stock prices) By Meredith Grossman Dubner CHICAGO, Feb 13 (Reuters) - Shares of regional air carrier ExpressJet Hol= dings Inc. (XJT) plummeted 28 percent on Thursday in their biggest one-da= y percentage loss ever, after the airline said it would slow the delivery= of 60 regional jets. The stock, the top percentage loser on the New York Stock Exchange on Thu= rsday, plunged after the carrier said late Wednesday it was rescheduling = the delivery of 60 of its 78 remaining firm orders from Brazil's Embraer = (EMBR4) (ERJ). Airlines have been postponing aircraft deliveries since the Sept. 11 atta= cks because there is not enough demand to fill planes. Houston-based ExpressJet, which went public last April, sells all of its = capacity to Continental Airlines (CAL) and operates as Continental Expres= s, which flies 196 regional jets. = Jim Higgins, analyst at Credit Suisse First Boston, said the news was fur= ther evidence of the imbalance between the industry's supply and demand a= nd was particularly worrisome because it involved small aircraft that wer= e to be added at relatively low costs. "We have long worried about the saturation in regional jet capacity past = 2004 for a number of carriers," Higgins said in a research note. "Express= Jet's slowing of deliveries, the reason for which appears to be a hard lo= ok at the economics of regional jets in a revenue environment that has pr= obably changed forever, does nothing to diminish that concern." The regional carrier said the move would hurt its 2003 earnings per share= by 2 cents to 4 cents. ExpressJet also said it now expects 2004 earnings= per share to be off by 16 cents to 18 cents versus estimates under its p= revious fleet plan. Another analyst, though, said the stock decline was exacerbated by the ne= gative tone permeating the industry. "How many other airlines are even making any money in this environment?" = said Tony Cristello, analyst at BB&T Capital Markets. "The company is sti= ll going to have some pretty good earnings growth. It also creates greate= r visibility because now we see deliveries into 2005 and 2006. So I don't= necessarily think it's such a bad thing." Still, Cristello lowered his 2003 earnings estimate for ExpressJet to $1.= 48 per share from a previous forecast of $1.50. For 2004, Cristello revis= ed his earnings forecast to $1.58 per share from a previous estimate of $= 1.74 a share. Analysts had expected ExpressJet to earn $1.51 a share for 2003 and $1.72= a share for 2004, according to Thomson First Call. Embraer will now deliver 36 of the ERJ-145XR 50-seat jets to ExpressJet i= nstead of 48 in 2003, and will deliver 21 planes instead of 36 in 2004. I= n 2005, however, Embraer will deliver 21 jets instead of two and it will = deliver another eight planes to ExpressJet in 2006. ExpressJet said Continental proposed the changes as the airline struggles= to match capacity with demand. In exchange, Continental extended Express= Jet's guarantee as the exclusive provider of regional jet service in its = hubs by one year, to Jan. 1, 2007. Embraer, the world's fourth-largest builder of commercial aircraft, trimm= ed its delivery goals as a result of the new agreement. In Sao Paulo trading, Embraer shares closed down 12 percent, hitting a 16= -month low. ExpressJet is Embraer's top customer, representing about 22 p= ercent of its backlog, according to Merrill Lynch. ExpressJet shares closed down 28 percent, or $3.27, at $8.25 on the New Y= ork Stock Exchange. Continental ended down 2.7 percent, or 15 cents, at $= 5.45 on the NYSE. (Additional reporting by Carlos A. DeJuana in Sao Paulo= ) = =A92003 Reuters Limited. = Roger EWROPS