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Technology Stocks : ESIO: Electro Scientific Inds. -- Ignore unavailable to you. Want to Upgrade?

To: mopgcw who wrote (38)	3/25/2003 8:55:03 AM
From: mopgcw	Respond to of 43

Investors Punish Electro Scientific After Dismal Results Dow Jones, Friday, March 21, 2003 at 15:15 By Michelle Rama Dow Jones Newswires NEW YORK -- Shares of Electro Scientific Industries Inc. (ESIO) sank to a new 52-week low Friday, as the company was engulfed by credibility concerns after reporting a fiscal third-quarter loss that was three times worse than guidance it gave investors. The Portland, Ore., maker of manufacturing equipment for high-tech electronics, late Thursday said it lost 37 cents a share in the quarter ended March 1. In February, the company told Wall Street to expect a loss of nine cents to 12 cents a share. The same time last year, it reported net income of six cents a share. Electronic Scientific blamed the poor showing on a $6.9 million expense for sales costs from warranties and inventory write-downs, and a $2.9 million restructuring charge. But the company further stunned investors by saying it will restate results for the last two quarters. That means the fiscal second quarter now will reflect a loss of 42 cents a share versus a previously reported 34 cents, while the first quarter will be revised to a loss of four cents versus a penny a share. Sales will be reduced by $200,000 in the second quarter and $100,000 in the first. The news raised a red flag over the company's accounting practices, prompting questions over management's credibility and at least one downgrade of its stock. Adams Harkness&Hill analyst Vernon Essi cut his rating to reduce from buy, citing the disappointing results and restatement, which means"about $3 million more in losses (10 cents per share) in Q1 and Q2."The restatement raises a credibility issue for Electro Scientific's President and Chief Executive James Dooley, Mr. Essi wrote in a research note. Mr. Dooley, he said,"was promoted to the post in December after serving as CFO among other managerial roles at ESI. These quarters in question occurred on his watch."Until credibility is restored, Mr. Essi said he sees the stock trading at tangible book value, currently about $12.13 a share. Company officials weren't immediately available for comment. In his research note, Adams Harkness' Essi also expressed concern over the semiconductor manufacturing equipment maker's third-quarter revenue declines."Every business unit declined materially on a sequential basis with the exception of vision, which only posted sales of $3.2 million in the quarter,"he wrote. ESI's component systems, semiconductor yield improvement, laser fine tuning and laser drills businesses all saw double-digit, sequential declines, he noted. A company spokesman reiterated the statement in ESI's press release that no further information can be released until the independent audit is complete. He said no date has been set for the conference call. Shares of Electro Scientific were off $2.78, or 18%, to $12.39 in late-afternoon trqading on the Nasdaq Stock Market after earlier reaching a new 52-week low of $11.45 below the previous low of $13.27 on Sept. 24. In his research note, Adams Harkness's Mr. Essi also expressed concern over the semiconductor manufacturing equipment maker's third-quarter revenue declines."Every business unit declined materially on a sequential basis with the exception of vision, which only posted sales of $3.2 million in the quarter,"he wrote. ESI's component systems, semiconductor yield improvement, laser fine tuning and laser drills businesses all saw double-digit, sequential declines, he noted. A company spokesman reiterated the statement in ESI's press release that no further information can be released until the independent audit is complete. He said no date has been set for the conference call.