Newport Beats Estimate

Improves gross margins, has lower expenses.
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Newport

(NEWP)

swung to a profit in the fourth quarter, aided by an improvement in gross margins and lower selling expenses.

The Irvine, Calif.-based laser and photonics product developer earned $6.5 million, or 16 cents a share, compared with loss of $66.8 million or $1.56 a share, a year ago. Adjusted for discontinued operations, earnings were 20 cents a share in the most recent quarter. On that basis, analysts surveyed by Thomson First Call were expecting earnings of 18 cents in the most recent quarter.

Fourth-quarter revenue rose 5.4% from a year ago to $103.9 million. Analysts were expecting revenue of $105.3 million in the most recent quarter. New orders received increased by 9.5% to $112.6 million resulting in a book-to-bill ratio of 1.08.

Newport expects sales for the first quarter of 2006 to be in the range of $102 million to $105 million and earnings of 11 cents to 14 cents. Excluding stock option expenses of 2 cents to 3 cents a share, the company expects first-quarter earnings to be in the range of 14 cents to 17 cents a share. Analysts estimate earnings of 16 cents a share on sales of $104.5 million.

"Our fourth-quarter sales were within our forecasted range and our orders were stronger than expected. We enter 2006 with excellent momentum, including a backlog that is over $7 million higher than it was at the beginning of the fourth quarter of 2005, the majority of which is expected to ship in the next six to nine months," the company said.

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