Corning says looking for Photonics partner
Thursday January 9, 4:39 pm ET
By Sinead Carew
Reuters
NEW YORK, Jan 9 (Reuters) - Corning Inc. (NYSE:GLW - News), the world's largest maker of fiber-optic cable, on Thursday said it is looking for strategic alternatives for its photonics business including the possibility of working with a partner in a bid to get back to profitability.
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The company also said it could cut more jobs this year if it needs to do so, Chief Financial Officer Jim Flaws told analysts at a Needham conference in New York on Thursday.
"We're absolutely focussed on getting back to profitability. If we need to make more job cuts we will do," Flaws said.
"We're also trying to reduce the loss in our photonics business," Flaws said pointing to a partnership as a possibility. Corning's photonics products manipulate light in communications networks based on fiber optics.
A partnership could involve anything from technology sharing, manufacturing outsourcing or product development, Corning spokesman Paul Rogoski said.
Flaws also told investors that the strategic alternatives for its photonics business would not change the company's goodwill situation.
Flaws made the comments a month after Corning said it would take non-cash impairment charges in the fourth quarter of up to $825 million.
Corning also said last month that it did not expect significant growth in the telecom business until late 2004. Telecom accounts for about half Corning's sales.
Flaws repeated this statement on Thursday.
It has repeatedly said it is targeting a return to profits in 2003 and it would do whatever is necessary to achieve that, including cutting more jobs. However, the recovery will be driven not by telecom, but by demand for liquid crystal displays, environmental technologies and semiconductor materials.
Corning has said it wants to reduce losses in its photonics business by narrowing its product line, reducing fixed costs and cutting capacity, including more job cuts.
The company responded to the slowdown in demand last year by shuttering plants and cutting more than 20 percent of its work force. Employment will be reduced to 23,500 when the last round of cuts is completed this year.
In October, Corning posted its sixth straight quarterly loss as sales dropped, and it warned of a weaker-than-expected fourth-quarter.
Additional reporting Ben Klayman |
