Red Ink Flows at ADC8/23/2002 6:13 AM Eastern
ADC Telecommunications Inc. will try to make do on quarterly revenues of $250
The company made that announcement late Thursday in releasing its
third-quarter earnings, which included a net loss of $629 million on revenue of
The large spike in net loss was related to one-time noncash income-tax
Of greater concern is the telecommunications meltdown, which is forcing ADC
to lower quarterly expenses below the $250 million mark.
'As the extent of the downturn and the eventual recovery in this difficult
market is uncertain, we are now taking additional cost-reduction actions to
lower our quarterly sales breakeven point below $250 million,' chairman,
president and CEO Rick Roscitt said.
In last year's third quarter, ADC posted a net loss of $58 million on revenue
of $548 million. One year later, revenue dropped to $235 million. In
second-quarter 2002, revenue reached $298 million and net loss was $89
ADC emphasized that it had plenty of cash on hand ($550 million) to continue
operations, but that it would undertake more staff cutbacks to lower expenses
below the magic $250 million quarterly revenue line.
The company has already laid off 25 percent (9,000) of its work force this