said its first-quarter loss will be narrower than expected on lower-than-forecast revenues and laid out nonspecific plans for more layoffs and potential business divestitures. The company also said its president and chief executive plans to retire this month.
The fiber-optic cable giant also reiterated its belief that its industry is bottoming but also said telecommunications companies continue to reduce their capital spending.
Corning expects to lose 10 cents a share in the first quarter on sales of $900 million. Analysts surveyed by First Call were expecting a loss of 17 cents on sales of $941 million. "Although our telecommunications results remain weak, we are seeing improved results in a number of our information display and advanced materials businesses. Our liquidity remains excellent with over $1.8 billion in cash and short-term investments at the end of the first quarter," the company said.
Corning also said John W. Loose, 60, its president and chief executive, will retire on April 25. James R. Houghton, 66, the company's current chairman, will be appointed to the additional position of chief executive. Houghton has been Corning's non-executive chairman since June 2001, and previously served as Corning's chairman and CEO from 1983 to 1996.
The company expects to take pretax restructuring and impairment charges of about $600 million during the second and third quarters of 2002. "While we have already reduced our operating costs significantly, we must continue to bring our costs and operations more in line with our near-term market outlook and the reality of being a smaller company.'' The company said it would specify the reductions "through a series of announcements as final decisions are reached over the next few months," but said they would include workforce reductions across all operating functions and corporate staffs; consolidation of organizational structures; plant closures; elimination of some research and development facilities; technical spending cuts; and centralization of administrative functions into shared services. The company will also weigh more business divestitures.