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Tuesday, electronic components maker Molex Inc. (MOLX), reported a huge loss in the fourth quarter from a profit last year, primarily the result of various charges related to restructuring and goodwill impairment, and a sharp decline in revenues on significantly lower order levels. The company also provided guidance for the first quarter of fiscal 2010, but refrained from providing full-year outlook citing limited visibility caused by current economic conditions.
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| | | {loadposition contentad} | | | | | The Lisle, Illinois-based company posted a fourth-quarter net loss of $219.7 million or $1.27 per share, compared to a net income of $52.6 million or $0.29 per share in the year-ago period. On average, 8 analysts polled by Thomson Reuters expected the company to report a loss of $0.07 per share for the quarter. Analysts' estimates typically exclude special items. Among the peers, Amphenol Corp. (APH) last month reported a lower profit in second quarter impacted by weak sales. Amphenol's second quarter net income was $74.9 million or $0.44 per share, compared to $109.9 million or $0.63 per share a year earlier. Net sales declined 19% to $685.2 million from the previous year.
Another peer, Tyco Electronics Ltd. (TEL) last week reported a net loss for the third quarter resulted from the losses at the discontinued Wireless Systems business. Net loss for the quarter was $74 million or $0.16 per share, compared with net income of $330 million or $0.68 per share in the previous year. Tyco's third quarter net sales decreased 34% to $2.51 billion from the prior year. Results for the quarter included a restructuring charge of $21.1 million after-tax or $0.12 per share. The company also recorded intangible asset impairments and other charges of $11.1 million after-tax or $0.07 per share and a pretax and after-tax goodwill impairment charge of $171.0 million or $0.99 per share in the fourth quarter. The intangible asset and goodwill impairment charges were related to the Automation and Electrical business unit of Molex' Custom and Electrical segment due to the impact of the recent downturn in the industrial market. Excluding the restructuring and impairment charges, the company posted a non-GAAP pretax profit of $1.3 million for the quarter. In the preceding third quarter, Molex reported a loss on hefty pre-tax restructuring charges and lower revenues. Third quarter net loss was $58.6 million or $0.34 per share, compared to a profit of $50.3 million or $0.28 per share a year ago. Net revenues for the quarter under review declined 34.6% to $570.6 million from $871.9 million last year. Excluding the effect of currency translation, revenues fell 31.4%. Street analysts had a consensus revenue estimate of $555.26 million for the quarter. Orders for the quarter declined 33% to $576 million from the corresponding period a year before. Gross profit margin declined to 24.1% from 31.0% in the prior year, reflecting lower absorption of manufacturing overhead resulting from significantly lower production volume. Selling, general and administrative expense declined significantly to $136.7 million from $171.1 million a year ago, due to the cost reduction actions and additional savings from the restructuring program. Capital expenditures for the quarter were $50.3 million, compared with $71.2 million in the prior year comparable quarter. The company's order backlog at June 30, 2009 was $253 million, compared with $436 million at June 30, 2008. Commenting on the results, Martin Slark, Chief Executive Officer said, "We are encouraged by the improvement in business levels, especially in the month of June when both revenue and orders reached their high for the quarter. It appears that inventory reductions in our industry's supply chain are substantially complete, which should result in further improvements in our business levels during the September quarter." In the third quarter, Molex posted revenues of $505.54 million, a decline of 38.5% from the prior fiscal year. For the full year, the company reported a net loss of $321.3 million or $1.84 per share, compared to a net income of $215.4 million or $1.19 per share in the previous fiscal year. Net revenue for the quarter declined to $2.58 billion from $3.33 billion in the prior year. Analysts expected the company to report earnings of $0.34 per share on revenues of $2.57 billion for the full year. Looking ahead, Molex said it expects first quarter earnings in a range of breakeven to $0.06 per share on revenues in the range of $590 million to $630 million. Estimates for the quarter includes a pretax restructuring charge of about $10 million or $0.04 per share after-tax. Analysts currently expect the company to report breakeven per share on revenues of $581.60 million for the quarter. In addition, the company said that due to the limited visibility caused by current economic conditions, it is not providing full year guidance at this time. MOLX closed Tuesday's regular trading on the Nasdaq at $18.61, up $0.29 or 1.58%. After hours, the stock lost $0.29 or 1.56%. In the past 52-week period, the stock traded in the range of $9.68 - $26.67, with an average 3-month volume of 1.3 million shares.
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