Financial focus

04 Aug 2008

A round-up of the latest financial reports from Newport, Corning, Toshiba and StockerYale.

• A combination of weak economic conditions and lower sales to research customers and semiconductor equipment manufacturers adversely affected the Q2 2008 results from Newport. Total sales for the company in the quarter reached $117.7 million, an increase of 6.1% over Q2 2007, but a profit of $8 million became a loss of $2.8 million over the same period.

Despite this, the company said it was pleased by the traction being gained in the photovoltaic (PV) market, and reported strong year-on-year increases in its PV and industrial manufacturing businesses. "Our new orders from photovoltaic customers in the second quarter exceeded $6.5 million, the second highest quarterly level ever recorded by Newport from this market after the all-time record level in the first quarter of this year," Robert Phillippy, president and CEO, commented. "In the first half of 2008, we have received new orders totalling approximately $22 million from customers in the photovoltaic industry."

• Strong demand for LCD glass substrates helped Corning achieve sales of $1.69 billion in Q2 2008, an increase of 19% compared with the same quarter last year. A rise in sales of LCD TV units in the US helped boost the company's overall profit from $546 million in Q2 2007 to $782 million. Corning believes that growth in the LCD glass market will remain healthy this year because retail demand for LCD products has stayed strong, and predicts that its LCD glass sales will rise by 25% to 30% during the year.

"Despite concerns of a US economic slowdown, Corning performed very well in the second quarter," said Wendell Weeks, chairman and CEO. "We saw continued strong demand for our LCD glass substrates throughout the quarter. US retail data for the month of June showed retail sales of LCD TV units up 35% year-on-year."

Corning also announced its intention to have repurchased up to $1 billion of common stock before the end of 2009. This is in addition to the $500 million repurchase authorized last year, of which $125 million remains.

• The Toshiba group posted operating losses of ¥24 billion ($224 million) for the first quarter of 2008, and predicted that trading conditions would remain difficult in the future. Despite improved performance in the LCD portion of its portfolio, Toshiba's Electronic Devices division fell significantly into the red thanks to a decline in the semiconductor sector and the influence of yen appreciation, and reported a loss of ¥34 billion.

Better news came from the Digital Products division, which was previously home of the company's HD DVD optical disk business before Toshiba withdrew from that market. Steady sales of hard-disk data storage helped the division post an operating profit of ¥13.2 billion.

• Cost controls and improved utilization of capacity allowed StockerYale to report 30% year-on-year growth in revenue from its Photonic Products business in Q2 2008, including record net sales from StockerYale Canada (lasers) and StockerYale Ireland (LED systems). Sales of laser modules, laser diodes and LED systems increased 28% year-on-year and 8% quarter-on-quarter.

Gross profits increased by 18% compared with the previous quarter and by 27% year-on-year, to reach $2.9 million, also a record. "It is clear that steps taken in recent quarters to achieve more consistent operational and financial execution are starting to bear fruit," commented CEO Mark Blodgett. These steps included the closure of the company's Montreal machining department, as management took steps to reduce fixed costs and the unfavourable impact of foreign currency exchange.

StockerYale also continues to pursue Virtek Vision International, and increased the offer in its cash takeover bid to CDN$0.80 per Common Share.