Optoelectronics sector drags Keithley downwards

Keithley Instruments has announced results for its fiscal 2001 third quarter that ended 30th June 2001, and were in line with the guidance it gave on 18th April 2001.

Keithley Instruments has announced results for its fiscal 2001 third quarter that ended 30th June 2001, and were in line with the guidance it gave on 18th April 2001.

Net sales of $36.3 million for the quarter of fiscal 2001 decreased 10% from $40.5 million in last year's third quarter.

Sequentially, sales decreased 16% from the second quarter of this year.

Net income for the third quarter of fiscal 2001 decreased 29% to $4.1 million, or $0.25 per share, compared with $5.8 million, or $0.36 per share, in last year's third quarter.

Orders for the third quarter of $27.9 million decreased 35% from the prior year and 23% from the second quarter.

Geographically, orders were down 36% percent in the USA, 18% in the Pacific Basin and 41% in Europe when compared with the prior year.

Compared with the second quarter, semiconductor orders were down about 21%, telecommunications orders were down about 6% and optoelectronics orders were down approximately 67%.

For the first nine months of fiscal 2001, orders from the company's semiconductor customers comprised about one-third of the total, while telecommunications and optoelectronics orders made up approximately 12 and 16%, respectively.

Order backlog decreased $10.2 million during the quarter to $17.2 million at 30th June 2001.

"Conditions in segments of the electronics industry tied to global communications continued to deteriorate", stated Joseph P Keithley, the company's chairman, president and chief executive officer.

"Most notably, orders from our optoelectronics customers, those people supplying the components necessary for the build out of the Internet infrastructure, dropped significantly from the second quarter.

Although discouraging in the short-term, we continue to believe broadband holds good growth potential.

Our customer list continues to expand beyond established players to include increasing numbers of start-ups, both of which are investing in next-generation technologies.

Technology investments will be the key to the long-term growth of broadband".

"There is a lot of uncertainty about how long this downturn will last", added Keithley.

"Although our visibility is limited, based on our current order activity we would expect sales for the fourth quarter to range between $25 and $31 million.

Our pretax return on sales would be in the range of low single-digits to 10% depending on the level of sales.

We think we are at or near the bottom of the downturn, but decline to comment beyond the next quarter until tangible signs of a recovery become evident.

This is obviously a very challenging environment.

However, we remain confident in our strategy and in our ability to execute it profitably.

We have excellent customer relationships, a number of exciting new products for our targeted industries, and a very strong balance sheet.

We are committed to remaining profitable at the bottom of the downturn, while making the appropriate investments in key areas of strategic importance that will allow us to emerge from the downturn as a stronger competitor".

For the nine months ending 30th June 2001, net sales were $124.0 million, up 15% from $107.5 million last year.

Net income for the 2001 nine-month period was $16.1 million, or $0.97 per share.

This represents a 17% increase from $13.8 million, or $0.86 per share, last year excluding an adjustment to a gain recorded for the previous sale of a product line.

Net income as reported for the 2000 nine-month period was $14.1 million, or $0.88 per share.

The company has an open market stock repurchase program in place, the primary purpose of which is to offset the dilutive effect of employee stock incentive plans.

During the first six months of the program ending 30th June 2001, the company bought back 151,000 shares of its stock at an average cost of $18.86 per share including commissions.

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