Corning may need to lay off more workers, analysts predict

Fiber-optic cable giant Corning Inc., may need to lay off more workers than planned, due to weaker-than-expected profit margins and tough trading conditions in the telecom sector, analysts said on 24 …

Fiber-optic cable giant Corning Inc., may need to lay off more workers than planned, due to weaker-than-expected profit margins and tough trading conditions in the telecom sector, analysts said on 24 January 2003, following disappointing 4Q results. Corning reported a USD 709 million net loss on 23 January 2003. Shares in the company fell 10% on the New York Stock Exchange on 24 January 2003. Analysts estimates of the number of job cuts required vary between 2,000 – 4,000 jobs. At present Corning is looking at making around 1,500 redundancies, although according to one source, the company itself is uncertain of how many more cuts will be needed as the effect of previous cuts will not be felt for a few more quarters. The company said it plans to finish the year with 22,000 workers, down from 23,500 at the end of 2002 and almost 44% below its peak of 41,800 in 2000. Corning has repeatedly said it will do what is necessary to return to profitability by the end of the year. That determination has led some analysts to accept the company“s target as achievable. On 23 January 2003 Corning reported a fourth-quarter net loss of USD 709 million, or USD 0.60 a share, compared with a loss of USD 656 million, or USD 0.69 a share, in the same quarter of 2002. Sales from ongoing operations fell about 20%. Its gross profit margin in the quarter was 14.3% of sales, below the 16% to 17% range expected by analysts. The gross margin was 19.5% in the third quarter, which included the profitable precision lens business sold in December 2002 and not counted in fourth-quarter results.