Pass the prozac - Earnings Reports - electronics industry report

Electronic News, July 22, 2002 by Heidi Elliott

The second quarter of this year is shaping up to be just like the first. The latest set of earnings reports came in last week indicating that Q2 continued to be dreary. For the most part, companies reported a decline from 2001 results, while some noted sequential gains for the June quarter.

Industry giant Intel Corp. reported a sequential decline in both revenue and net income. But the company reported gains in market share and expects a flat-to improved Q3. "Although an overall industry recovery has been slow to materialize, we still expect a modest seasonal increase in demand in the second half," said CEO Craig Barrett in releasing results. "In this environment, our strategy remains the same: focus on execution, take prudent cost-cutting measures and invest to further improve our competitive position and longterm growth prospects."

Among capital equipment makers, Photon Dynamics outperformed its peers. While Kulicke & Soffa, ASML, Asyst Technologies, Axcelis and Ultratech Stepper reported losses, Photon Dynamics eked out a positive net result (net income for the June quarter was $117,000.) However, Asyst Technologies and Axcelis managed to narrow their net losses on a year-over-year basis.

Contract manufacturers Celestica and Benchmark Electronics reported improved figures as well. "We have responded to the current economic environment by driving meaningful cost reductions for our customers while still producing consistent margins, healthy improvements in our cash cycle and steady increases in our overall returns on capital," said Celestica Chairman and CEO Eugene Polistuk in a statement.

Many company executives believe the near future is just too tough to call. "It continues to be difficult forecasting the future," said Amphenol Corp. CEO Martin Loeffler. "Economic forecasters that previously anticipated recovery in the second half of this year generally seem to be forecasting a more gradual and deferred recovery, especially as it relates to technology markets." In fact, many companies and industry analysts don't expect to see a recovery until some time in 2003.