Sawtek maintains Q3 outlook, sees slowdown bottom
biz.yahoo.com
(UPDATE: Adds closing stock price in paragraph 5)
ORLANDO, Fla., June 19 (Reuters) - Wireless communications parts maker Sawtek Inc. (NasdaqNM:SAWS - news) on Tuesday maintained its previous earnings forecast and suggested the bottom in the slowdown has been
reached.
The Orlando, Florida-based company, which makes surface acoustic waves, or SAW, filters that block the interference that can affect wireless phone transmissions, said it was leaving its third-quarter forecast from May unchanged. It forecast earnings per share of 6 cents to 8 cents on revenues of $17 million to $19 million.
Earnings could be at the low end of the range, Chief Financial Officer Ray Link told analysts on a conference call. The results will not include costs related to its merger with communications chip maker TriQuint Semiconductor Inc. (NasdaqNM:TQNT - news), which will be accounted for in the September quarter.
Before the May warning, analysts had estimated Sawtek would earn 17 cents to 20 cents a share in the third quarter.
Sawtek's shares closed off 8 cents at $16 in Nasdaq trading on Tuesday before the conference call, above its 52-week low of $14.05 and off the year-high of $80.44.
Hillsboro, Oregon-based TriQuint, which makes cell-phone receivers and amplifiers, said on May 16 it would acquire Sawtek for about $1.3 billion in stock in a move to offer lower-cost and better-integrated mobile-phone components. The deal is expected to close July 19.
However, Sawtek President and Chief Executive Kimon Anemogiannis also said the worst may be over, at least for his company.
``Our backlog has been rising slightly with orders starting with a slow but somehow steady recovery,'' he said. "The pushout and cancellation activity that we have experienced since January 2001 has essentially stopped.
``In general, it appears we have stabilized, indicating that we have bottomed,'' he added. ``But it may be premature to signal that we are starting to ramp up.''
Sawtek said it has cut more than 10 percent of its workers at plants in Orlando and Costa Rica since the beginning of the year, and also has reduced executives' salaries.
Link added that Sawtek's revenues are affected by the continued slowdown in the wireless communications sector.
Telecom equipment suppliers have continued to struggle as the economic slowdown shows no sign of ending soon. Nortel Networks Corp. (NYSE:NT - news)(Toronto:NT.TO - news), a Sawtek customer, on Friday chilled the markets when it announced plans to slash another 10,000 jobs and predicted a huge $19.2 billion second-quarter loss as demand for its products slows.
Sawtek's largest customer, Chicago area-based Motorola Inc. (NYSE:MOT - news), reported in April its first quarterly operating loss in 15 years.
In early April, Sawtek saw its fiscal second-quarter profits fall 26 percent to $9.3 million because of the slowdown in customer spending. Revenues declined about 24 percent to $28.4 million.
The company said then it saw third-quarter revenues falling 10 percent to about $25.6 billion and lower net income. Link, who will become CFO of the combined Triquint-Sawtek, said then the June quarter looked to be the industry's trough. |
