Corning to beat forecast; CEO set to retire
Even though more job cuts are in Corning Inc.'s future, the maker of optical fiber says it may have finally hit bottom, and is eyeing 2003 as the year it will return to profitability.
For the first quarter ended March 31, 2002, Corning expects to post a net loss of 10 cents a share, which beats analysts' consensus estimates by 7 cents a share. Sales for the quarter will fall short of analysts' expectations. The company expects to report sales of $900 million, while analysts were expecting $941 million, according to Thomson Financial/First Call.
Corning ended the quarter with $1.8 billion in cash and short-term investments.
Although Corning is beginning to see a turnaround, the ongoing weakness in the overall telecommunications market will force the company to make additional cuts. Corning expects to take a $600 million pretax charge over the second and third quarters of this year for restructuring. No specific details are being released, but the company expects to eliminate jobs across all of its businesses, consolidate organizational structure; close plants; eliminate some R&D facilities; and cut spending. Corning also will consider divestitures of several small businesses or investments.
Last year, Corning idled many of its manufacturing facilities to reduce costs as its customers curbed their spending.
Separately, chief executive John Loose announced he plans to step down from his post on April 25. Chairman James Houghton will take up the CEO post, while Wendell Weeks will be named president and chief operating officer at the company's annual meeting. Weeks is president of Corning Optical Communications.
Corning will report first-quarter results on April 22.