ADC Posts Big Loss on Charges, Lowers Next-Quarter Guidance
A WSJ.COM News Roundup
MINNEAPOLIS -- ADC Telecommunications Inc. swung to a loss in its fiscal second-quarter on restructuring charges as revenue fell 15% amid a lingering slowdown in demand for telecommunications gear. The company also lowered its guidance for the third quarter.
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The telecom-equipment provider late Thursday said its net loss came to $1.05 billion, or $1.33 a basic share, for the quarter ended April 30, compared with net income of $718.3 million, or 96 cents a diluted share.
Excluding charges of $930 million, the company lost $115 million, or 15 cents a share, compared with earnings excluding items of $72 million, or 10 cents a share, a year earlier. Analysts surveyed by Thomson Financial/First Call were looking for ADC to post a loss of 13 cents a share.
Revenue fell 15% to $652.4 million from $770.6 million a year earlier. Broadband Infrastructure and Access sales declined 24% to $497 million in the quarter, while international sales increased 3% to $165 million.
ADC had warned Wall Street in March that it would post a loss of 10 cents to 15 cents a share on revenue of $650 million to $700 million. The company also said it would lay off as many as 7,000 employees in a companywide restructuring.
"Once our aggressive cost reductions and product-line rationalizations in 2001 are behind us, we expect the new ADC to be well positioned to regain higher rates of growth and profitability when our worldwide service provider customers increase their capital spending in the future," Chairman and Chief Executive Officer Richard R. Roscitt said Thursday in a written statement.
Some of ADC's main customers are the competitive local exchange carriers, or CLECs, that sell voice, video and data services.
The company noted that demand is beginning to stabilize in its core products but it remains cautious in its outlook for future business growth.
ADC said it expects to report third-quarter pro forma earnings per share of break-even to a loss of five cents on sales of roughly $600 million to $650 million, before disposition of nonstrategic businesses. Analysts surveyed by First Call were looking for ADC to report a profit of two cents a share in the third quarter.
ADC reported results after the market close. At 4 p.m. on the Nasdaq Stock Market, ADC shares were up 54 cents to $10.29. |
