UPDATE 3-Energy Conversion to cut 300 jobs on Europe woes; CEO quits
* To cut 20 pct of global workforce
* Restructuring expected to save $20 mln per year
* Q3 adj loss/shr $0.41 vs est loss/shr $0.47
* Says CEO Mark Morelli resigns
* Shares down 11 pct (Rewrites first paragraph, add analysts comments; updates shares)
BANGALORE, May 10 (Reuters) - Energy Conversion Devices Inc will lay off 300 people, or a fifth of its workforce, as it aims to lower costs amid cut-throat competition, and the solar company said its chief executive had resigned.
The Auburn Hills, Michigan-based company posted its eighth straight quarterly loss on Tuesday, as total revenue plunged 70 percent due to lower sales in European markets.
Energy Conversion, like many of its peers, has been plagued by concerns about cutbacks in incentives for solar power in top European markets such as Italy, France and Germany.
"They are consistently challenged in terms of costs," Burt Chao, an analyst with Simmons & Co, said.
"Because they are smaller, they find themselves at a pretty big disadvantage in the current environment."
Italy last week pared back the generous incentives that had made it the world's second largest solar market behind Germany, feeding fears that an oversupply of solar modules could pressure prices and margins in the industry. [ID:NLDE7440Z]
Italy, the United States, Spain and France were the largest markets for Energy Conversion last year.
The company makes lightweight, flexible solar laminates for rooftops and buildings, and its products are less efficient at converting sunlight into electricity than rival technologies.
Energy Conversion named Jay Knoll as its interim president, and has initiated a search for a permanent CEO to replace Mark Morelli.
Morelli's stint as the CEO since late 2007 saw the company's shares rising to their highest levels of more than $75 in 2008. The stock has since tanked and was down 11 percent at $1.56 on Tuesday on Nasdaq.
"The abrupt shifts in European solar policies are having a profound impact on the outlook for the global solar industry and our business," interim President Knoll said.
"Our restructuring actions are designed to align our business with these new realities in the solar industry."
Energy Conversion expects to save at least $20 million from its restructuring efforts annually.
Raymond James analysts said the job cuts and board reshuffling were aimed at focusing on the more stable North American market.
"We are increasingly deploying resources in emerging photo voltaic markets in North America as well as China, India, Korea, north Africa and the Middle East where we see exiting real world opportunity for our products," Knoll said on a conference call.
For the third quarter, the company lost 41 cents a share on an adjusted basis. However, margin rose to 16.3 percent from 2 percent in the year-ago quarter. [ID:nWNAB7883]
Analysts were looking for a loss of 47 cents a share, according to Thomson Reuters I/B/E/S. (Reporting by Swetha Gopinath, Krishna N. Das in Bangalore and Nichola Groom in Los Angeles; Editing by Maju Samuel and Saumyadeb Chakrabarty) (firstname.lastname@example.org; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 580; Reuters Messaging: email@example.com)
- Malaysia Airlines plane missing, presumed crashed in South China Sea |
- CORRECTED-UPDATE 4-Malaysia Airlines plane crashes in South China Sea with 239 people aboard - report
- China draws 'red line' on North Korea, says won't allow war on peninsula
- Malaysian plane crashed off Vietnam coast: state media
- No signal picked up from missing Malaysia Airlines plane-Vietnam official