UPDATE 1 - ADC to cut more jobs, miss revenue targets
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UPDATE 1 - ADC to cut more jobs, miss revenue targets
(Adds details, comment)
MINNEAPOLIS, Aug 1 (Reuters) - ADC Telecommunications Inc.
on Wednesday said it would cut an additional 2,500 jobs, close
some facilities and sell certain assets, and forecast that it
would miss its third-quarter revenue targets due to the
slowdown in demand for telecommunications equipment.
The company said it expects a fiscal third-quarter loss of
about 5 cents per share -- the bottom of its previously stated
range of estimates.
Revenue for the quarter, ended July 31, will fall short of
$600 million, the low end of its previous guidance, the company
said.
Analysts were expecting a loss of 1 cent to 9 cents per
share, with a mean estimate of 4 cents, according to research
firm Thomson Financial/First Call. In the year-earlier third
quarter ADC earned 15 cents per share.
The Minneapolis-based firm, whose products are used for
high-speed Internet and voice lines, said it will record
charges in the third and fourth quarters for the job cuts,
which are in addition to 7,000 positions already eliminated. By
October 31, ADC said, its worldwide employment will be reduced
by about 40 percent since November 2000.
ADC said it would close facilities or curtail
operations in Copenhagen, Denmark, and El Paso, Texas. It said
it also has halted construction and development of
manufacturing facilities in Shakopee, Minnesota., Juarez,
Mexico, and Glenrothes, Scotland.
ADC said it had agreed to sell its Access Products Division
and Broadband Wireless Group to Platinum Equity LLC, a
privately held firm, for undisclosed terms. About 350 employees
are affected by the sale, which includes facilities in
Portland, Oregon, and McMurray, Pennsylvania.
On an annual basis, ADC's completed and planned actions are
expected to bring a cumulative reduction of operating expenses
of up to $450 million, the company said.
"In looking forward, we are ahead of plan in our overall
cost reductions to date and have made enormous progress in our
goal to return to profitability and positive cash flow.
However, given the slow industry-wide recovery of revenue
growth, we do believe that it is prudent to remove additional
costs from our operations in the fourth quarter and beyond,"
ADC Chief Executive Rick Roscitt said in a statement.
ADC said it had about $575 million in cash, marketable
securities and unused lines of credit as of July 31.
ADC shares closed Tuesday at $4.91 on Nasdaq.
REUTERS
Rtr 10:55 08-01-01
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