The charges keep on coming.
warned Monday that its fourth-quarter pro forma loss will be wider than expected, owing to a raft of last-minute operating charges.
The optical fiber and component maker company now expects to lose 28 cents a share on revenue of $975 million. Analysts had forecast a loss of 22 cents on revenue of $1 billion. Those figures are pro forma, excluding certain expenses. On a generally accepted accounting principles basis, Corning now expects to lose 69 to 70 cents a share for the quarter.
The company says it will take a pretax charge of $178 million, or 12 cents a share after taxes, to cover the costs of employee stock options, obsolete inventory and restructuring actions. Corning emphasized, however, that its businesses "performed as expected for the quarter" and that revenue was "in line with our expectations." Corning's stock, which has lost more than 80% of its value in the last year, dropped 30 cents in after-hours trading to $9.51.
The latest charges only add to the red ink flowing in the fourth quarter from the onetime highflier. Corning already had planned a pretax restructuring charge to the tune of $600 million, or 38 cents a share after taxes. The restructuring charges come as Corning scales back its operations to adjust to the industrywide plunge in demand for optical networking supplies.
Earlier this month, Corning reopened two manufacturing facilities that had been mothballed during the 18-month sales slump. Some investors had taken the reopening as a sign of burgeoning demand for telecommunications fiber, though Corning warned against that sentiment.
When demand dried up so suddenly a few years ago, outfits like Corning and their big telecom-industry customers were left with mountains of unsold goods and raw materials. In July, the company took a $283 million charge for old, unusable inventory. Like other networking gearmakers, including
, Corning is still holding far too much inventory.
While outfits such as JDS Uniphase and
era of massive writedowns, Corning assured investors in its release Monday that it doesn't expect to take any further goodwill writedowns in coming quarters. Goodwill in this instance refers to the difference between the value of an asset and the price at which it's carried on the balance sheet. The writedown spree is the result of big tech companies having used their highflying shares to enact bubble-era acquisitions at inflated prices.
Corning is scheduled to report fourth-quarter results on Jan. 23.