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Vishay posts loss, sees job cuts

(Reuters) - Chipmaker Vishay Intertechnology Inc VSH.N posted a fourth-quarter loss, said it was evaluating additional plant closures and expects more job cuts, sending shares to their lowest in over 18 years.

The company, which has already reduced close to 9 percent of its workforce in the fourth quarter, said it had laid off 700 more employees in January.

The company employs about 27,900 people across its operations in United States, Europe and Asia.

Last year, Vishay had shut factories in Netherlands, Belgium and Brazil. In a conference call, a company executive said the company is looking at closing facilities in Monroe, Connecticut and Westbury in New York.

A slump in demand for chips used in electronic products and automobiles has prompted several semiconductor makers to cut jobs and close plants.

In January, world's largest chipmaker Intel Corp INTC.O said it would close plants in Southeast Asia and the United States, cutting as many as 6,000 jobs as quarterly profit tumbled 90 percent.

Vishay aims to reduce its inventories by between $50 million and $100 million during 2009.

“We want to avoid at any account an increase of inventories. We do this by layoffs, plant shut downs,” Chief Executive Gerald Paul said in a conference call.

The company also said it is implementing a program to reduce fixed costs by $150 million for 2009.

Vishay had $30 million of free cash in fourth-quarter and it aims to have as much liquidity as possible and said there will be no acquisitions.

Last year, Vishay had aborted an offer to acquire rival International Rectifier IRF.N for $23.00 a share, putting an end to a two-month-old merger battle.

“During the last quarter of 2008, we -- like the rest of our industry -- experienced an unprecedented drop of shipments and order intake. Management for cash became our focus,” Paul said in a statement.

TRAILING THE STREET

For the quarter ended December 31, Vishay posted loss from continuing operations of $3.47 a share, that included a charge of $3.40 per share reflecting mostly a non-cash goodwill impairment charge.

Excluding the charge, the company posted a loss of 7 cents a share from continued operations. Analysts were expecting the company to break even during the quarter.

Revenue dropped 21 percent to $575.4 million during the quarter.

Gross margins fell to 14.8 percent in the quarter, compared with 22.9 percent a year ago.

Vishay also forecast first-quarter sales to be weaker at lower margins sequentially.

“The current uncertainties do not permit a more quantitative guidance,” Paul said.

Shares of Malvern, Pennsylvania-based Vishay fell 2.67 percent $3.27 Tuesday afternoon on the New York Stock Exchange.

Reporting by Shrutika Verma in Bangalore; Editing by Deepak Kannan and Saumyadeb Chakrabarty

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