Spectrum Brands Inc. (SPC) said on Monday that federal prosecutors are investigating recent disclosures by the consumer products company regarding earnings and financial forecasts, sending Spectrum's shares to their lowest level in two years.

The investigation is related to disclosures regarding results for its third quarter ended in July and lowered outlook Spectrum issued on September 7 for the fourth quarter of fiscal 2005 and fiscal year 2006, Spectrum said.

Atlanta-based Spectrum, which makes Rayovac batteries and other products, said it plans to fully cooperate with the investigation by the U.S. Attorney's Office for the Northern District of Georgia.

"We have only recently received the communication on this matter and aren't in a position to comment on the specifics," Spectrum said in a statement.

SunTrust Robinson Humphrey analyst William Chappell said he was surprised that the U.S. Attorney's office has stepped into the process rather than the Securities and Exchange Commission. He expects the investigation to be an overhang on the stock and maintained his "buy" rating on the shares.

Shares of Spectrum fell 5.5 percent to $17.01 in trading on the New York Stock Exchange. The shares, which traded as high as $46.11 in March, have declined in recent months amid a string of earnings warnings.

News of the investigation comes just four days after Spectrum posted a fourth-quarter net loss and slashed its 2006 outlook for the second time in just over two months. Spectrum cited declining sales in its battery business and higher costs for raw materials, fuel and transportation for its view.

On July 28, the company said it expected fiscal 2005 profit of $2.40 to $2.43 a share before one-time items, cutting the top end of its forecast from $2.50. Spectrum also forecast 2006 earnings of $2.70 to $2.85 a share at that time. Just six weeks later, on September 7, Spectrum cut its 2006 forecast to a range of $2.50 to $2.65.

On September 7, Spectrum also forecast fourth-quarter earnings of 10 cents to 15 cents per share, excluding any special items. Wall Street analysts on average had been looking for 37 cents per share at the time.

"While we were not pleased by the guidance revision in such a short time frame, we believe the issues impacting the quarter were real and have since been validated by the disappointing quarterly results" from competitor Energizer Holdings Inc. (ENR) in batteries and Central Garden & Pet Co. (CENT) in pet supplies, Chappell wrote in a note.

Spectrum, formerly known as Rayovac, changed its name earlier this year as it expanded its reach beyond batteries through several acquisitions, including lawn, garden and pet products maker United Industries Corp. and fish and reptile supplies company Tetra Holding GmbH.