Shares of power-tool maker Techtronic Industries plunged in early trading yesterday as investors reacted to a profit warning from its biggest United States client. The shares slid 6.41 per cent to HK$7.30 before bouncing back to close down 3.2 per cent at $7.55, as the company moved to reassure investors that its own sales forecasts did not share Home Depot's gloomy outlook. Last week, Home Depot indicated sales could fall as much as 10 per cent in the fourth quarter to February, compared with its previous forecast of a 3 to 5 per cent drop. The decline would mark the retailer's largest quarterly decline. The company, which accounts for about 40 per cent of Techtronic's sales, also cut its annual earnings outlook, citing unexpectedly low holiday sales. Home Depot chairman Bob Nardelli said revenue growth would be stagnant this year. However, Techtronic countered the gloom with positive news of its own. It said sales of its Ryobi brand power tools in the US posted 35 per cent year-on-year growth in the fourth quarter. 'Our outstanding performance is a strong endorsement from the US tool buying public [for our products],' Techtronic chairman Horst Pudwill said. Home Depot executive vice-president Jerry Edwards said the firm's sales of Ryobi tools grew the fastest. Ryobi accounted for about 30 per cent of Home Depot's power tool sales. Analysts said the market might not be reacting only to Home Depot's warning, noting the share price, which more than doubled last year to HK$7.40 from $3.125, might have peaked. Sun Hung Kai research said Techtronic had sound fundamentals but its share price had reached a 'reasonable level'. The brokerage recommended profit taking at this level and gave it a price target of $6.50.