Weaker than expected demand and continued pricing pressure caused AVX Corp. to report a net loss of $15.9 million, or 9 cents per share on sales of $256.7 million in its first fiscal 2004 quarter ended June.
Operating results included restructuring charges of $2.8 million, or 2 cents per share, related to global headcount reductions during the quarter.
The Myrtle Beach, S.C., passive component supplier earned $1.3 million, or 1 cent per share on sales of $294.9 million in the year-ago quarter, and lost $14.0 million, or 8 cents per share on sales of $261.2 million in the previous quarter.
"It was again a challenging quarter," said John Gilbertson, president and chief executive of AVX, during a conference call with analysts. "Prices are still under pressure, eroding 5 to 6% quarter to quarter."
Gilbertson attributed some of the erosion to a product mix shift to smaller A and B case sizes in tantalum capacitors, along with continuing competition from Far East suppliers who are dropping prices in an effort to gain market share.
Gross margins were under 2%, a figure Gilbertson said would only improve if sales climbed back up to $280 to $300 million per quarter.
On a brighter note, Gilbertson said Asia improved its share of AVX's total sales from 35 to 37% quarter to quarter, and added that July sales have remained strong in that region.
Still, Gilbertson warned end market visibility remains weak and anticipates September quarter revenue to be flat with the June quarter.
"There's more enthusiasm regarding the second quarter, but you can't ship enthusiasm," he said.