ADCT lose($10 1/2 dwn $9.30) Q2 loss widens 15c vs 13c , restructuring, see's flat revs
MINNEAPOLIS, May 24 (Reuters) - Telecommunications equipment maker ADC Telecommunications Inc. (NasdaqNM:ADCT - news) reported a fiscal second-quarter net loss of $1 billion on Thursday and said it expects the economic slowdown to continue for the rest of the year.
ADVERTISEMENT
On a financial reporting basis, which includes the impact of all expenses, charges and credits, ADC's net loss in the quarter ended April 30 was $1 billion, or $1.33 a diluted share, compared to a net income of $718 million, or 96 cents a share, in the second quarter of 2000.
ADC, whose products are used for high-speed Internet and voice lines, reported a pro forma net loss in the quarter of $115 million, or 15 cents a share. Pro forma results exclude noncash stock compensation expenses, nonrecurring charges and restructuring charges and include certain one-time operating charges.
Analysts estimated ADC's second-quarter loss in a range of 10 cents to 16 cents, with a consensus at 13 cents, according to Thomson Financial/First Call, which tracks this data.
In last year's second quarter, the telecommunications equipment provider earned $72 million, or 10 cents a share. Sales in the second quarter fell 15 percent to $652 million from $771 million in the same period last year.
ADC's second-quarter loss echoes the struggles of other telecom-related firms that have been hurt by the economic downturn and slowdown in customer spending, including Nortel Networks Corp. (NYSE:NT - news)(Toronto:NT.TO - news), Motorola Inc. (NYSE:MOT - news) and Lucent Technologies Inc. (NYSE:LU - news)
In late March, ADC warned of the second-quarter loss, blaming an extremely challenging economic environment and a further slowdown in capital spending by communications service providers. Sales were estimated at about $650 million to $700 million, down from $771 million generated in last year's second quarter.
At that time, the company also said it would cut an additional 3,000 to 4,000 employees from its worldwide payrolls by the end of its fiscal year ending Oct. 31, 2001.
ADC said it expects to report third-quarter pro forma earnings per share in the range of break-even to a loss of 5 cents, on sales of $600 million to $650 million. Analysts had estimated a gain of 2 cents a share for the third quarter, with a range of a loss of 1 penny to a gain of 6 cents, according to First Call.
Fourth-quarter revenues, before disposition of businesses, are expected to be flat from the third quarter. ADC said it has targeted an additional expense reduction of about $50 million in the second half of the year allowing the company to return to profitability.
``We are taking aggressive actions to achieve more cost- efficient operations,'' Chairman and Chief Executive Richard Roscitt said in a statement.
``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,'' he added.
He said demand for ADC's core products has begun to stabilize.
Based on the company's previously stated intentions of selling or exiting certain noncore businesses to improve profitability, ADC said it expects to make corresponding adjustments to its outlook and record undetermined one-time restructuring charges. The timing of the charges will be determined by the exits and sales.
ADC shares closed up 54 cents, or 0.54 percent, at $10.29 on Thursday on Nasdaq. Over the past year, they have underperformed the Nasdaq Telecommunications index by about 38 percent.
In after-hours Instinet trading |
