23 July 1998: US-based international automotive mirrors, windows and interior trim and lighting and optical lense producer, Donnelly Corporation, has announced that the company“s fourth-quarter and y…
23 July 1998: US-based international automotive mirrors, windows and interior trim and lighting and optical lense producer, Donnelly Corporation, has announced that the company“s fourth-quarter and year-end earnings will be negatively affected by the loss of anticipated orders for injection-moulded lenses at Donnelly Optics Corporation, a wholly-owned subsidiary based in Tucson, Arizona. Late in June, Intel Corporation notified Donnelly Optics that, due to changing market dynamics, Intel had decided to cancel orders that Donnelly Optics had anticipated as an important source of business. As a result, the company will take a one-time charge against earnings of US$ 0.22-0.24 per share to write off tooling and other assets. Donnelly Optics had scaled up its operations in Tucson in anticipation of increased production volumes this year. As a result of these developments, the firm said it is continuing to experience losses that negatively affect Donnelly“s corporate earnings. The company has already announced that the company is evaluating a full range of options for restructuring or repositioning, to safeguard Donnelly“s investment in the unit and reduce the future negative impact on the company“s bottom-line earnings. “It is disappointing to have this development appear so suddenly, at the end of our fiscal year, because it overshadows the tremendous success we have built in our North American automotive operations and in some of our European operations,” said Dwane Baumgardner, Donnelly chairman and chief executive officer. “We are pleased, however, that our operational performance for the year will be within the range of analyst estimates of US$ 1.25-1.30 per share, excluding the one-time charge taken for Donnelly Optics.”