Kemet Corp.'s net loss widened and revenue fell 10% in the latest quarter as the company struggled with a weak pricing environment, low corporate spending on information technology equipment, and the initially high costs of reorganizing its operations.
The capacitor supplier said it lost $16.5 million, or 19 cents per share, in the fiscal 2003 fourth quarter ended March 31, compared with a net loss of $14.4 million, or 17 cents a share in the year-ago quarter.
Though Kemet has been taking steps to reduce its cost structure to match a much reduced revenue base, the Greenville, S.C., company has yet to find an effective remedy for the price erosion that is widely confronting component suppliers.
In the latest quarter, unit shipments of surface-mount capacitors and leaded parts increased, but pricing pressures led to a 10% decline in revenue, to $106.5 million, from $117.9 million, in the fiscal 2002 comparable quarter.
"Unit shipments in the March quarter were up 7% over the December quarter, while average selling prices declined 5%, said Jeffrey Graves, president and chief executive of Kemet, in a statement. "Kemet continues to be impacted by the sluggishness in the electronics industry, in general, and in corporate information technology and telecommunication equipment sectors, in particular."
Kemet's latest results included a charge of $18 million related to recent employee reduction and a $1.6 million charge described as a loss on commitments to purchase inventory, a reference to a long-term raw material procurement agreement the company signed during the last industry upturn.
The company did not provide estimates for June quarter sales but said it expects price declines to drop to a more normal annual rate of 6% to 8% as demand improves.