SAWS ( $13-bounce $18) second-quarter earnings fall
(UPDATE: Adds company, analyst comments throughout)
ORLANDO, Fla., April 9 (Reuters) - Wireless communications parts maker Sawtek Inc. (NasdaqNM:SAWS - news) on Monday said second-quarter profits fell 26 percent as another technology company blamed lower earnings on the drop in demand plaguing the sector.
ADVERTISEMENT
The Orlando, Fla.-based company, which makes surface acoustic waves, or SAW, filters that block the interference that can affect wireless phone transmissions, also said it sees fiscal 2001 revenues down 15 percent to 20 percent compared with 2000, and 2001 net income down slightly more than revenues in percentage terms as the slowdown continues into the third and fourth quarters.
``Everything we're looking at right now, it appears that the June quarter's going to be the trough and things should start getting a little better in the September quarter,'' Sawtek Chief Financial Officer Ray Link told analysts on a conference call, referring to the company's fiscal third and fourth quarters.
Among some of Sawtek's customers are the two cell-phone giants, Finland's Nokia (NYSE:NOK - news) and Motorola Inc. (NYSE:MOT - news) Those and other large technology firms have warned of curtailed customer spending as the economy has slowed.
Schaumburg, Ill.-based Motorola, Sawtek's largest customer, is expected to report its first quarterly operating loss in 15 years on Tuesday. Struggling telecommunications equipment giant Lucent Technologies Inc. (NYSE:LU - news) also is a large customer.
Sawtek said it sees revenues for the third-quarter ending in June 10 percent below the second quarter, and also expects lower net income. The company, which plans to spin off its SAW-based sensing instrument product line, said the decline in revenues is projected to be across most product lines. Sawtek did not provide a time table for the spinoff.
Sawtek said second-quarter net income declined to $9.3 million, or 22 cents a diluted share, compared with $12.6 million, or 29 cents, in the same period last year.
Revenues for the quarter ending March 31 fell to $28.37 million, compared with $37.6 million last year. The second- quarter revenues were also just short of the projected range Sawtek had offered Wall Street during a February warning.
Sawtek has cut some spending, reduced work hours, cut its Costa Rican work force by 10 percent and made the plans to spin off the sensor instrument production line in response to the current environment, President and Chief Executive Kimon Anemogiannis told analysts on the conference call.
The company's stock -- halted after markets closed following the release of its results -- ended down almost 9 percent, or $1.38, at $14.18 on the Nasdaq. The price set a new 52-week low and was off 82 percent from its 52-week high of $80.44 last December. In after-hours trading on Instinet, Sawtek fell to $13.75.
Wall Street was not surprised by the results as much as disappointed by Sawtek's forecast.
``They're not seeing any sort of recovery for two quarters. That's the bad news,'' First Union Securities analyst Mark Roberts said. ``The good news is they do seem to think that they are seeing that we're getting close to a bottom, that they're expecting some improvement in the fiscal fourth quarter.''
Analysts cut second-quarter earnings estimates after the company warned in February of lower orders, with a range of 21 cents to 23 cents a share from a consensus at that time of 29 cents, according to Thomson Financial/First Call.
Sawtek on Feb. 26 warned lower-than-expected orders would cause it to miss Wall Street forecasts for the quarter. It said it would earn 22 cents to 24 cents a share on sales of $29 million to $31 million.
Email this story - Most-emailed articles - Most-viewed articles |
