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Newport Corp. Cuts 182 Jobs

July 10, 2001|From Bloomberg News

Newport Corp., which makes equipment used to produce semiconductors and fiber-optic parts, said Monday that it laid off 182 workers, or 10% of its staff, as customers cut their spending on new manufacturing tools.

About half the Irvine company's dismissals will come at its plants in Irvine and Garden Grove.

New orders for its test, measurement and automation equipment slumped as customers such as Nortel Networks Corp., JDS Uniphase Corp. and Corning Inc. posted weaker-than-expected sales of telecommunications gear.

Newport, which had $13 million worth of orders canceled in the second quarter, said new orders dropped to $54 million in the quarter from $90.9 million in the first quarter.

"We don't expect a meaningful recovery for the second half of 2000," said Newport Chief Financial Officer Charles Cargile. "Beyond that, we are at the mercy of our customers."

Newport laid off 141 full-time and 41 temporary workers in California, Arizona, Colorado and Minnesota to save $5 million to $7 million a year, said company spokeswoman Cecilia Wilkinson.

The company will pay up to $1.5 million in severance to the workers. Wilkinson said most of those laid off are engineering and production workers mainly in the fiber-optics unit, part of the slumping telecommunications industry. Fiber-optics orders fell to $11 million in the second quarter, down 69% from the first quarter and 75% from last year's second quarter.

Newport expects profit, excluding one-time charges, of $1.10 to $1.15 a share this year, less than the $1.21 average estimate of analysts surveyed by First Call/Thomson Financial. The company said it earned about 32 cents a share in the second quarter, in line with analysts' forecasts.

The equipment maker expects to take a charge of $6 million to $10 million in the third quarter to write off the value of spare inventory and cover the cost of possibly discontinuing sales of some products.

Newport stock, which has dropped 69% this year, gained 37 cents to close Monday at $24.05 on Nasdaq.

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