ADC Enters 2002 with Sales Drop

Author:
Publish date:

The promise of economic improvement didn't help quarterly sales figures at
ADC Telecommunications Inc.

The broadband-network-equipment and systems provider saw its sales plummet 50
percent in the first quarter of 2002 compared with the same period in 2001.

Of that total, broadband infrastructure and access sales dropped from $558
million in the first quarter of 2001 to just $197 million for the same quarter
in 2002, which ended Jan. 31.

That drop was blamed primarily on declines in fiber and copper-connectivity
sales.

The dwindled sales figures contributed to a $57 million pro forma operating
loss for the quarter at 5 cents per share. But company officials sounded a
hopeful note that this is the bottom of the economic trough for the
Minneapolis-based company.

'We see encouraging signs that a bottom of the cycle may be near, leading to
the sequential growth of quarterly sales and earnings again when
telecommunications capital spending rebounds,' chairman and CEO Richard R.
Roscitt said in a release.

That includes indications that the company's broadband customers are now
stabilizing and that sales of ADC's 'Cuda 12000' Internet-protocol-access switch
to cable operators continue to be strong, rising 133 percent in the quarter.

Still, the company is cautious about the rest of 2002, expecting only modest
quarterly growth. ADC may also take additional restructuring charges in 2002 to
lower expenses, according to its forecast.

Revenues for the second quarter are projected to rise only slightly to $295
million to $305 million, with a pro forma loss per share at 4 cents to 5
cents.

Related