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Technology Stocks : Nortel Networks (NT) -- Ignore unavailable to you. Want to Upgrade?

To: Cooters who wrote (13854)	5/5/2004 3:44:20 PM
From: Cy B	Respond to of 14638

Bookham attributes expected Q2 loss to Nortel & $US weakness May 05, 2004 14:21:00 (ET) CBS Market Watch.com NEW YORK (CBS.MW) -- American Depositary Receipts of Bookham Technology plummeted 35 percent Wednesday after the optical components-maker posted a first-quarter loss and forecast weaker-than-expected revenue in the second quarter. The U.K.-based company, which trades on the Nasdaq exchange and receives most of its orders in dollars, said it's planning more aggressive cost cutting to combat the pressure on its top line. The company expects revenue to fall 3 to 12 percent in the second quarter from the first, mainly due to the dollar's weak level against sterling, as well as lower demand from its primary client Nortel Networks (NT, Trade), which accounts for about 58 percent of revenue. Bookham (BKHM, Trade) is forecasting revenue of $36 million to $40 million for the quarter. The average estimate of analysts polled by Thomson First Call is for revenue of $49.20 million. The company expects its gross margin to fall 6 to 12 percent and is pegging its cash burn rate at $22 to $28 million after $20.4 million in the first quarter. "Our intention is to reduce overhead cost by about 25 percent from current levels over the next 12 months," chief executive Giorgio Anania said in a statement. One way of cutting costs is through the rapid commissioning of the company's new China plant, which it purchased through the acquisition of New Focus. Bookham bought the San Jose, Calif.-based maker of photonics and microwave solutions to non-telecom markets in March. In addition to its California base, New Focus has a large manufacturing facility in Shenzhen, China. Bookham has started hiring staff in China, where it's hoping to slash the costs of making its products. A management team is in place to oversee transmitter and receiver optical and mini-amplifier assembly, with other products slated to follow later. Bookam lost $32.1 million, or 7 cents a share, in the first quarter. Revenue rose to $41.3 million, up 25 percent from a year ago and in line with analyst estimates. The company said it's considering moving its domicile from the UK to the U.S., although it would need shareholder approval for that move. Outside of the UK and China, the company has plants in Canada and Switzerland and employs about 1,750 people. Shares were last trading down 35.1 percent at $1.00. A total of 24 million shares had traded in the session so far, compared with an average full-day volume of 2 million.