Oct 05, 2001
The Corning, N.Y., supplier of fiber optic products is expected to record a $1 billion charge in the second half of 2001 as a result of the restructuring, with $350 million to be taken in the third quarter.
Corning had previously announced workforce reductions totaling 8,000 employees, and now expects cuts to total 12,000 by the end of 2001. Corning's 2001 peak employment was 43,000.
The company will maintain limited optical fiber production at its Wilmington, N.C., plant to meet customer demands, but will idle production at plants in Concord, N.C.; Neustadt Bei Coburg, Germany; and Noble Park, Victoria, Australia.
Full manufacturing is expected to resume at these plants in 2002 as business conditions improve, according to the company.
A fifth optical fiber plant in the United Kingdom will maintain limited production before closing at the end of 2001, affecting 436 employees at the Deeside, North Wales, site.
The slowing in Corning's business will also affect capital expenditures. The company is projecting its 2002 capital spending at under $1 billion, down from $1.8 billion in 2001.
While Corning said it has discontinued providing earnings guidance due to uncertain market conditions, it is not expected to meet analysts' earnings guidance for its fiscal third quarter ended Sept. 30. Pro forma earnings are expected to be 2 to 6 cents per share, before restructuring charges.
In its second fiscal quarter, Corning recorded a net loss of $4.8 billion or $5.13 per share, including restructuring charges, on sales of $1.9 billion.
