Textile analyst Kay Norwood expects Pillowtex — Dallas, Texas-based owner of Fieldcrest Cannon — to report a loss today when it releases third quarter earnings.

Norwood, who tracks the textile industry for IJL Wachovia Securities in Charlotte and publishes a quarterly report on the industry, also expects more plant idlings and possible closings.

This morning, the union representing Pillowtex workers said it is “becoming increasingly concerned about senior management’s ability to turn this situation around.”

The Union of Needletrades, Industrial and Textile Employees (UNITE) also rejected “any notion of saving the company at the expense of jobs.”

The union called on Pillowtex’s senior management “to come forward immediately with an explanation of its strategy and a real plan for implementation.”

The entire home textiles industry is suffering from slow retail sales, resulting in fewer orders for the products of companies like Pillowtex, which makes sheets and towels here, Norwood said.

“I don’t look for anything very pretty (from Pillowtex today),” Norwood said.

Pillowtex will release the latest quarterly figures this afternoon, after the stock market closes. On Wednesday, its stock closed at $1.63.

During the first half of this year, the company reported losses of $19.8 million, versus an $11 million profit for the first six months of 1999.

That surprised some analysts who predicted that the company could break even in the second quarter and make money in the second half of the year.

“Clearly, the outlook for the home fashions industry is worse now than it was three months ago, or six months ago,” Norwood said.

Norwood said she doesn’t expect Pillowtex to return to profitability this year. Pillowtex competitors WestPoint Stevens and Springs Industries have reported third-quarter profits, but WestPoint’s are half of its 1999 third quarter profits and Springs’ profits remained flat.

And the soft retail market may contribute to more than just losses and shrinking profits. Norwood said she expects more plants to stand idle throughout the industry this year to curtail production.

Pillowtex has idled local plants three times already in 2000, each time to reduce its inventory, company officials said.

WestPoint has said stopping a plant costs $1 million a day in overhead.

“I don’t know you can say the same thing for Pillowtex, but it tells you it’s very costly to not operate a plant,” Norwood said. “The only thing that costs more is to carry too much inventory.”

With slow sales and the industry outsourcing more production, particularly overseas, companies must realistically determine how much they need to produce in the U.S., she said.

And that could lead to more plants being closed, like the Pillowtex plant in Salisbury closed this summer.

“I expect to see more of that,” Norwood said.

In a statement released this morning, Mark Pitt, regional director of the textile union, said, “The former Fieldcrest Cannon operations remain viable and profitable operating units. However, they are overwhelmed by debt from Pillowtex’s acquisition of Fieldcrest Cannon and later the Leshner company.”

Pillowtex is carrying debt of almost a billion dollars.

Agreeing that third quarter earnings will fall “significantly below company projections,” Pitt said, “Neither the production employees nor the operations management has caused the current problems. The workers at Pillowtex have stood behind the company as it has tried to fix the problems.

“... At this critical time, we call on the senior management of the company to cooperate with the union in ensuring the preservation of jobs.”

Last year, the Pillowtex blamed losses on problems with new computer systems, inventory markdowns, idled operations to reduce inventory and lower margins on inventory liquidations.

Pillowtex reported an overall loss of $31.8 million in 1999. The company reported a net profit in 1998 of $40.8 million.