Kemet Corp. reported a net loss of $31.7 million, or 37 cents per diluted share,
on sales of $103.7 million in its third 2003 fiscal quarter ended December 31.
That was higher than the loss of $11.1 million, or 13 cents per share, on
sales of $113.1 million in the previous quarter, and the $26.9 million, or 31 cents
per share loss, on sales of $117.3 million in the year-ago third fiscal quarter.
Though the Greenville, S.C., capacitor supplier reported that unit
shipments rose 2% sequentially over the September quarter at its OEM and EMS
customers, overall unit shipments declined 2% as Kemet's distributors engaged in
year-end inventory reductions. Distributors accounted for 35% of sales in the
On top of that, average selling prices continued their downward slide,
falling 6% in the quarter. David Maguire, Kemet's chairman and chief executive,
told analysts during a conference call he expects price erosion to gradually
subside, but hesitated to say when that might happen.
The December quarter marked Kemet's fourth unprofitable quarter in the
last five, as the company continues to suffer from weak demand in markets such
as telecom and computer infrastructure. Still, citing the cyclical nature of the
electronics industry, Maguire expects Kemet to be well positioned to benefit
from an industry rebound.
"We remain bullish on the industry long-term," Maguire said during the
conference call. He noted that the company continues to develop new
higher-margin products, such as aluminum capacitors, and will begin production
in China this year for the first time.
For the fourth 2003 fiscal quarter ended March, Kemet projects sales will
rise 5% over the December quarter, with gross margins ranging from 12 to 14%.