* 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 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
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
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,
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.