STM Wireless, Reporting Loss, Will Cut Jobs

Citing weakness in emerging markets, Irvine-based STM Wireless Inc. said Friday it will reduce its work force, restructure the company and report a loss for the fourth quarter.

The company, which provides telecommunications in rural areas using satellite networks, said it would lose as much as $11.5 million for the quarter and $11.1 million for all of 1998, its third consecutive annual loss. Analysts had expected the company to earn more than $500,000 for the three months, according to Zacks Investment Research Inc.

The company would not say how many of its 140 jobs would be eliminated, except to note that the reduction would be “commensurate with our drop in revenue.”

The employees are evenly divided between the company’s Irvine and suburban Atlanta offices, officials said.

The company said its sales for 1998 would be about $40.6 million, a 22% drop from last year’s $52.1 million. Much of the drop in sales during 1998 occurred because the company was unable to replace a $30-million contract that it had completed in 1997, said Joseph Wallace, chief financial officer.

The company also said John Acker, president of STM’s network systems division, has resigned effective immediately from both his operating post and from the company’s board of directors.

The company did not give a reason for his departure. He could not be reached for comment.

As part of the company’s reorganization, Acker will not be replaced and the company’s two divisions will merge into one, Wallace said.

The company also blamed weakness in Latin American and Asian economies for the drop in its financial results, but declined to elaborate on how much of its business comes from those areas.

The company’s stock on Friday fell 75 cents to $2.50 a share.