Photon Dynamics (PHTN) slashed fourth-quarter guidance, citing an inventory glut in the liquid crystal display television screen business.
The San Jose, Calif., supplier of integrated yield management solutions for the flat panel display market made $4.2 million, or 25 cents a share, for the quarter ended June 30, reversing the year-ago loss of $3.6 million, or 21 cents a share. Revenue rose to $51.7 million from $39.1 million a year earlier.
The latest quarter eased past the Thomson Financial analyst consensus estimate, which called for a 23-cent profit on sales of $49.4 million. But citing "lower than anticipated bookings for the next several quarters," the company said it expects to lose around 20 cents a share for the fourth quarter on revenue of about $32.5 million. Analysts were looking for a 15-cent profit on sales of $45 million.
"Recently, many of our customers have suffered from reduced profitability and cash flow as a result of oversupply in a seasonally slow marketplace for LCD products," said CEO Jeff Hawthorne. "While we believe this situation to be temporary because we are still early in the adoption phase for LCD televisions, our customers have delayed several investment decisions for the coming months."The company's comments came a day after an inventory glut in the LCD business felled glass giant Corning (GLW - Get Report). "The company is prudently cutting back on discretionary and variable spending at the same time it is continuing to invest aggressively in future products," Hawthorne said. "If market conditions improve and our customers decide to re-accelerate their investments, Photon Dynamics is well-positioned to respond quickly." Shares fell 40 cents during regular trading Wednesday, coming with 15 cents of a 52-week low, before being halted in postclose acton at $11.10.