is preparing for another round of job cuts as the Minnetonka, Minn.-based network equipment maker attempts to trim costs and focus on better-selling products.
Company officials wouldn't comment on the size or timing of the next phase of cuts, but CFO Robert Switz characterized it as less of an across-the-board move and more of a product-specific reduction.
Switz made it clear that the company would be shifting toward faster-growing gear and looking to discontinue its lagging efforts. Switz made his comments in a recent sidebar discussion at the
Merrill Lynch Global Communications
conference in New York this week. ADC rose 19 cents Thursday to close at $10.38.
The 21,000-employee company has already fired 1,400 people, or 6% of its staff, in the past four months as it grapples with the spending slowdown and the continued downturn in such businesses as digital subscriber line, or DSL, equipment.
ADC makes what's known as broadband access gear. These are cabinet-sized switches that help bring higher speeds to "last mile" network connections, such as copper phone lines and TV cables.
An ADC spokesman says the company has weathered spending slowdowns before, and expects to do as much this go round.
"Our efforts, at this point, are to make sure our operations are focused and tight so that when we get through this period we are ready to start growing at the rates we were before," the spokesman says.
The company is expecting this year's sales growth to range between 10% and 20%. In the last two years, the company's growth has been in the high 30%-40% range.
analyst Steve Levy likes ADC's chances in this environment, given its range of broadband gear and the health of its customers, which are largely the Baby Bells and cable companies. Levy reiterated a strong buy rating on ADC Thursday. Lehman has done no underwriting but has advised ADC on recent acquisitions.
Levy says the company is headed in the right direction in terms of products and strategy and that "other opportunities are going to come from better focus on expenses."
ADC appointed former
business services chief Rick Roscitt as its new CEO in January. Roscitt is still acquainting himself with the operation and Wall Street is waiting to hear him outline his charter for the company.