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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (35183)	6/19/2003 10:53:19 PM
From: elmatador	Respond to of 74559

If this sector is still down, means tech slump will continue. More six weeks of (tech) winter, folks. You see, the inventories were real big, probably a lot of stuff in the gray market still to be sold. No self respect Cisco will publicly tell you that. Solectron shares hit by $2.8bn write down By Tom Foremski in San Francisco Published: June 20 2003 0:00 \| Last Updated: June 20 2003 0:00 Shares in Solectron, a leading contract electronics manufacturer, on Thursday plunged 15 per cent following disappointing third quarter results that included a $2.8bn goodwill write down. The company also said that its loss of $3.1bn in the quarter had put it out of compliance with an undrawn $450m credit facility. It is in negotiations with its bankers to amend the terms of the deal and said it finished the quarter with $1.7bn in cash and short-term investments. The group currently has no plans to use the credit facility. Solectron has suffered along with other contract electronics manufacturers because of more than two years of weak markets. This followed several boom years as many companies outsourced their manufacturing operations. However, the slump in business has left the company with a glut of manufacturing capacity. In March, it said it would close 3 million square feet of manufacturing space and layoff 12,000 workers. This is in addition to 40,000 job cuts since 2001, leaving it with 60,000 workers. Mike Cannon, chief executive of Solectron, said, "While this quarter was complicated with a number of revaluations that had a negative impact on earnings, we believe the resulting balance sheet is stronger and better positions us for the future." Third quarter revenue was $2.8bn compared with $3bn and a loss of $111m in the year ago quarter. Sales in the fourth quarter are estimated to be $2.6bn to $3bn with a loss of 2 cents to 6 cents a share excluding any special charges. Excluding special charges, Wall Street expected a loss of about 3 cents a share instead of the loss of 10 cents per share. In extended hours trading on Thursday, Solectron lost 64 cents per share to $3.75. Tibco Software, the US enterprise software group on Thursday fell 10 per cent in late trading after it missed Wall Street earnings estimates for its second quarter by 1 cent per share.