ON Semiconductor Corp. announced that it expects second quarter 2001 revenues to be down 12 to 15% from the first quarter and expects a loss per share of 35 to 40 cents, excluding restructuring charges, amortization of goodwill and other intangibles.
The expected loss per share includes a tax reserve of 12 cents against the benefit of the net operating loss expected in the second quarter.
In the first quarter of 2001, ON Semiconductor reported revenues of $361 million and a loss per share of 7 cents, before restructuring charges and other intangibles. The company originally expected its second quarter revenues to be flat or slightly down from the first quarter.
In ON's second quarter, the rate of order cancellations has decreased significantly from the first quarter. However, continued high customer inventory levels are pushing out many orders and caused part prices to decline 10% from the first quarter, it said.
ON Semiconductor expects third quarter revenues to be down slightly from the second quarter with little change in operating margin.
In response to its inventory conditions, the company recently announced accelerated cost reduction measures, including reducing its workforce by 8 to 12%, or about 1,000 positions. Other measures include temporary plant shutdowns with mandatory vacation, salary reductions for U.S. employees, reduced capital expenditures and continued rationalization of manufacturing capacity.