UPDATE 3-Barco Q2 disappoints, unveils cost cuts plan

(Updates after news conference, with job cuts)

By Philip Blenkinsop

BRUSSELS, July 23 (Reuters) - Belgian display and visual systems company Barco (BAR.BR) reported much lower than expected second-quarter results on Wednesday, knocking its shares, as it unveiled a 30 million euro ($47.76 million) cost reduction plan.

Barco shares fell as much as 16.7 percent to 33.21 euros, their lowest level since November 2001.

The company suffered a double hit from the weak dollar and a sharp sales fall at its media and entertainment division, which makes digital cinema projectors and large screens such as those used for sports stadiums. A new projector for presentations was also delayed.

Barco, whose displays are used as scoreboards, medical imaging systems, flight simulators and at pop concerts, said earnings before interest and tax (EBIT) fell 68 percent year-on-year to 5 million euros.

The average in a Reuters poll of five analysts was 13.7 million euros. The reported figure included 1.6 million euros in restructuring costs.

Sales were down 6 percent at 179.6 million euros, compared with the analysts' average forecast of 196 million, while net profit dropped 68 percent to 4.6 million euros, compared with an expected 12.0 million euros.

Chief Executive Martin De Prycker acknowledged the results were weak, but said sales grew 1 percent at constant currencies.

Barco, for which some 50 percent of sales are linked to dollars, was hit by that currency's 16 percent slide year-on-year against the euro.

Barco unveiled a 30 million euro cost-cutting plan, including layoffs aimed at improving EBIT in 2009 and offsetting inflation. De Prycker told a news conference 113 jobs would go initially, with more to follow.

It would result in a one-time restructuring cost of 20 million euros in the second half of this year. Barco added it expected a significant improvement in the operating result in the second half from the first, excluding this one-off.

Barco had said in April that it expected a year-on-year rise in sales and profit in the second quarter and sales and profit growth this year. Analysts had believed the latter forecast was under threat.

KBC Securities cut its rating on the stock to reduce from accumulate after the "disastrous" results.

Christophe Dessain of Bank Degroof described the results as weak on all lines, notably profitability.

He said he would review his estimates, but would probably keep an accumulate rating as his price target would not be 15 euros lower than the current 50 euros.

"There is still value in the company," he said.

Barco sounded one bright note -- that orders rose by 2 percent to 185.4 million euros and that it was working on a number of large contracts.

Barco's order book stood at 332.6 million euros at the end of June, versus 322.4 million euros a year earlier. (Reporting by Philip Blenkinsop; editing by Sue Thomas/Rory Channing)