Solectron Meets Earnings Target but Will Cut 8,200 Jobs Worldwide
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Solectron Corp., the world’s largest contract electronics manufacturer, met its second-quarter earnings target but said it’s cutting 8,200 jobs worldwide amid weaker demand and an uncertain outlook for the second half of its fiscal year.
“Changing economic conditions overall led to a significant reduction in demand from our customers as we moved through the quarter,” said Chief Executive Koichi Nishimura. The Milpitas, Calif.-based company has begun cutting jobs, with a goal of reducing its work force of 79,000 by more than 10%.
Solectron, which had reaffirmed its targets in January as many brand-name computer firms reported weakness, said its cash earnings per share were 30 cents in the second fiscal quarter, up from 19 cents a year earlier. The company, which has been on an acquisition spree, said its sales rose 86% to $5.4 billion.
Executives would not give full-year or fourth-quarter forecasts, given uncertain demand, but told analysts it would be tough to meet its earlier sales target of $23 billion for 2001. Solectron also said it expected to take a $300-million to $400-million pretax restructuring charge in its third quarter to help it “realign its capacity and capabilities.”
Solectron shares slid to $20 in after-hours trading from its close of $21.49, up $1.39, on the New York Stock Exchange.
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