UPDATE 3-GT Advanced to cut jobs to cope with weak Asia demand
* To cut 20 pct of U.S. workforce, 30 pct of Asia - CEO
* Says Q3 revenue would be at low end of its forecast
* Shares fall as much as 20 pct
By Swetha Gopinath and Krishna N Das
Oct 31 (Reuters) - GT Advanced Technologies, a solar and LED equipment maker, said it would slash about 25 percent of its workforce and would l i kely report third-quarter revenue at the low end of its forecast due to weak demand in its main market, Asia.
Shares of GT, which makes machines used to manufacture solar and LED equipment, fell more than a fifth to $4.03 on the Nasdaq, their lowest in more than five months.
"The Asian banks are not motivated to extend any new loans to buy new equipment," Chief Executive Tom Gutierrez told Reuters. "If the banks stop lending, which is my concern, that's a problem."
GT, which will report results on Nov. 6, had forecast third-quarter revenue between $110 million and $140 million last month. On an adjusted basis, it had expected results to range between a loss of 5 cents per share and a profit of 2 cents.
Gutierrez declined to give more details on the company's third-quarter results, but said: "Obviously if there was a huge surprise of any kind, we would have had to disclose it."
Analysts on average expect a profit of 4 cents per share for the quarter on revenue of $125.4 million, according to Thomson Reuters I/B/E/S.
MAKING THE MOVE
GT, which had 460 employees and contract workers in the United States and 203 in Asia as of March 31, will cut about a fifth of its U.S. employment base and about 30 percent in Asia, Gutierrez said.
The company expects to save about $13 million annually from the job cuts and take a related restructuring charge of about $4.2 million in the fourth quarter.
"The headcount reduction announced today is on the steeper side of what we would have expected, but it is not surprising," said Raymond James analyst Pavel Molchanov.
"Both of its businesses are experiencing cyclical problems due to excess capacity - solar as well as LEDs," he said.
GT also said it would consolidate its existing business units -- photovoltaic, polysilicon and sapphire -- into a single group called crystal growth systems.
The restructuring comes as the company's solar customers struggle with weak demand and tight financing, mainly in China. Asia contributed 95 percent of the company's revenue of $955.7 million during the year ended March.
Chinese solar companies have been battered by a steep fall in prices for solar equipment. They have also been slapped with import duties in the United States and face similar action from the European Union.
Any action in Europe is expected to be more severe than that in the United States as the European Commission is looking at the entire solar value chain, unlike the U.S. regulators who allowed Chinese companies to import cells to China from other countries, make them into panels and then export the panels to the United States free of anti-dumping duties.