Newport Again Slashes Staff
Newport Corp., an Irvine maker of equipment used to produce semiconductors and fiber-optic parts, said Monday that it is firing an additional 10% of its work force and closing three plants as it copes with slumping demand.
The company, which serves some of the hardest-hit technology fields, will dismiss 170 to 190 workers as part of an effort to save as much as $18 million a year, said Charles F. Cargile, Newport’s chief financial officer.
In July, the company cut 182 employees, about 10% of its work force.
The company will close plants in Garden Grove, San Luis Obispo and Longmont, Colo., consolidating operations in its Irvine plant. The company will keep a staff of engineering and customer support workers in San Luis Obispo, Cargile said. The company’s stock, which has lost 90% in the last year, dropped $1.11 a share Monday to close at $14.79 on Nasdaq, its lowest point in the last year. The company’s news was released after the close of regular trading, but in after-hours trading, the stock sank as low as $13.
“There is currently an inventory glut of the products our customers sell, and consequently they are buying less of our equipment,” Cargile said.
The high inventory levels at Nortel Networks Corp., JDS Uniphase Corp. and other customers for Newport’s fiber-optic communications products contributed to about half of the sales slowdown. Those customers have reported weaker-than-expected sales of telecommunications gear.
The rest of Newport’s sales decrease stems from delayed orders by chip makers, Cargile said.
Newport also lowered sales and earnings estimates for this quarter. It now expects third-quarter revenue to be $58 million to $62 million, as much as $14 million shy of its previous estimates. It said fourth-quarter sales will be little changed from the third quarter.
Newport said that it expects third-quarter profit per share, excluding one-time charges, to be slightly better than the break-even point and that fourth-quarter profit should be a bit higher. It was expected to earn 17 cents in the third quarter and 18 cents in the following three months, according to analysts surveyed by Thomson Financial/First Call.
Newport said it will take charges of about $38.5 million in the third quarter. Including the charges, it will have a third-quarter loss of 70 cents a share.
Before the initial cuts in July, Newport had about 100 employees in Garden Grove and 630 to 640 at its Irvine headquarters and plant. With both cuts, it will have a total of about 600, Cargile said.
*
Bloomberg News was used in compiling this report.
