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10-11-2006, 10:51 AM
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Solectron to Cut 1,400 Jobs, Q4 Profit Rises
By Tracy Heffner
Tuesday, 10 October 2006
MILPITAS, CA – Solectron Corp. said it would cut about 1,400 jobs and take restructuring charges of $50 million to $60 million, even as it said its quarterly profit rose.
The company reported that the charges and job cuts would be spread over the next 12 months and result from a plan to realign its manufacturing capacities, which it said will improve its growth and profitability prospects in the coming quarters. It said about 90% of the charges would be cash expenditures.
"I'm confident we can get it done within a year," said Mike Cannon, president and CEO in the company's earnings conference call.
Cannon would not give details of which exact facilities are affected by the restructuring but confirmed that its "high-cost geography" facilities in Europe would be significantly impacted by the restructuring. Solectron has facilities in Britain, France and Germany as well as Central and Eastern Europe.
The company also said that a second phase of restructuring is planned to be completed by the end of the 2008.
Solectron said fiscal fourth-quarter net income rose to $36.8 million compared with $11.5 million in the same quarter a year ago. Analysts polled by Reuters Estimates had been expecting net income of 5 cents a share.
Revenue rose 7.4% to $2.9 billion from $2.4 billion last year. Analysts, on average, had been expecting revenue of $2.71 billion.
Solectron to Cut 1,400 Jobs, Q4 Profit Rises
By Tracy Heffner
Tuesday, 10 October 2006
MILPITAS, CA – Solectron Corp. said it would cut about 1,400 jobs and take restructuring charges of $50 million to $60 million, even as it said its quarterly profit rose.
The company reported that the charges and job cuts would be spread over the next 12 months and result from a plan to realign its manufacturing capacities, which it said will improve its growth and profitability prospects in the coming quarters. It said about 90% of the charges would be cash expenditures.
"I'm confident we can get it done within a year," said Mike Cannon, president and CEO in the company's earnings conference call.
Cannon would not give details of which exact facilities are affected by the restructuring but confirmed that its "high-cost geography" facilities in Europe would be significantly impacted by the restructuring. Solectron has facilities in Britain, France and Germany as well as Central and Eastern Europe.
The company also said that a second phase of restructuring is planned to be completed by the end of the 2008.
Solectron said fiscal fourth-quarter net income rose to $36.8 million compared with $11.5 million in the same quarter a year ago. Analysts polled by Reuters Estimates had been expecting net income of 5 cents a share.
Revenue rose 7.4% to $2.9 billion from $2.4 billion last year. Analysts, on average, had been expecting revenue of $2.71 billion.