Symbol Technologies Expects 2nd Quarter Results Below Analyst Estimates
Monday July 16, 4:30 pm Eastern Time
Press Release
HOLTSVILLE, N.Y.--(BUSINESS WIRE)--July 16, 2001--Symbol Technologies, Inc. (NYSE:SBL - news), a global leader in mobile data management systems, today announced that revenue and earnings for the second quarter ended June 30, 2001 are expected to be significantly below analyst estimates due to new signs of weakness in Symbol's vertical markets and an increase in the global slowdown in information technology capital spending.
Revenue for the second quarter is now expected to be approximately equal to the $341.4 million reported in the year-ago quarter. Net income for the second quarter is now expected to be approximately $7 million, or approximately $0.03 per diluted share, compared to net income of $36.2 million, or $0.16 per diluted share, in the second quarter of 2000. Second quarter 2001 results include a provision of approximately $11 million net of taxes for reduced collectability of accounts receivable due to challenges facing OEM partners and the worsening capital spending environment and excludes the inventory writedown discussed below.
Symbol also expects to record an inventory writedown of approximately $70 million net of taxes, or $0.31 per diluted share, in the second quarter reflecting lower demand for current radio frequency (RF) infrastructure and systems products from major networking/communications and other OEM partners coupled with technological obsolescence due to planned introductions of new RF infrastructure products and mobile computing appliances. After the one-time non-cash charge, Symbol expects to report a quarterly net loss of approximately $63 million, or approximately $0.28 per diluted share.
Tomo Razmilovic, president and CEO, said, ``Symbol normally generates the majority of each quarter's revenues from orders for immediate shipment in the last few weeks of the quarter, but in the second half of June we experienced a rapid and unexpected decline in orders for immediate shipment from a wide range of customers and partners. Although our bookings in the second quarter were down marginally from the 2001 first quarter, on the positive side, our bookings showed solid growth of approximately 20% year-over-year with an equipment book-to-bill ratio of approximately 1.5 to 1 in the second quarter. Our backlog is solid - up approximately 40% year-over-year - albeit skewed toward the fourth quarter of 2001 and into 2002. Forecasting revenues in this economic environment is difficult, but we now expect third quarter revenue to be approximately $350 million and, based on our fourth quarter backlog which is 40% higher than the third quarter backlog, we now expect fourth quarter revenue to be approximately $385 million, up approximately 10% sequentially over the third quarter. Based on these revenue expectations, we currently see full year 2001 diluted earnings, excluding one-time items, in the range of $0.30 to $0.35 per share.''
Razmilovic continued, ``Given the increasing challenges faced by our communications and networking partners, the new signs of weakness in our vertical markets, and our lower revenue expectations, we are aggressively pursuing further supply chain efficiencies in addition to those announced earlier this year which may result in an additional one-time charge in the 2001 third quarter. We are committed to generating increased profitability, even with lower revenue growth, and with additional focus on balance sheet management.''
Razmilovic concluded, ``In spite of the difficult environment, we remain very optimistic about our future prospects. We continue to see significant new opportunities and are introducing innovative new products that we believe will underpin a resumption in strong growth in both revenue and earnings in 2002 and beyond.''
Symbol will report second quarter earnings after the market closes on July 26.
Symbol Technologies, Inc., winner of the National Medal of Technology, is a global leader in mobile data transaction systems, providing innovative customer solutions based on wireless local area networking for data and voice, application-specific mobile computing and bar code data capture. Symbol's wireless information appliances connect the physical world of people on the move, packages, paper and shipping pallets, to information systems and the Internet. Today, some 10 million Symbol bar code scanners, mobile computers and wireless LANs are utilized worldwide in markets ranging from retailing to transportation and distribution logistics, manufacturing, parcel and postal delivery, government, healthcare and education. Symbol's systems and products are used to increase productivity from the factory floor to the retail store, to the enterprise and out to the home. Information about Symbol is available at www.symbol.com and 1-800-722-6234.
This news release contains forward-looking statements based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties include price and product competition, dependence on new product development, reliance on major customers, customer demand for our product and services, control of costs and expenses, international growth, general industry and market conditions and growth rates and general domestic and international economic conditions including interest rate and currency exchange rate fluctuations. For a further list and description of such risks and uncertainties, see the reports filed by Symbol with the Securities and Exchange Commission. Symbol disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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