Newport aims to ride out recession

04 Feb 2009

Some markets stay robust, but semiconductor equipment sales were the lowest since 2004.

Newport reported that sales in the fourth quarter of 2008 totalled $107.4 million, down by 9% compared with the fourth quarter of 2007. Sales for the full year of 2008 totalled $445.3 million, roughly unchanged from 2007.

Overall the company reported a net loss in Q4 2008 of $140.7 million, after a net income of $25.1 million in the fourth quarter of 2007. For the full year Newport posted a net loss of $140.9 million compared with net income of $43.9 million the previous year, although it indicated its belief that these results were influenced by a number of items outside of the company's core operating results.

"We continue to integrate our core competences in lasers, optical systems and motion control technology to provide solutions that enhance the manufacturing process of solar cells and panels," Newport's president and CEO Robert Phillippy told analysts. "We also achieved all-time record orders in our scientific research, aerospace and defence/security market sector during the fourth quarter of 2008."

Like other manufacturers, Newport felt the pain of declining semiconductor equipment markets, described by Phillippy as the overriding negative feature of Q4. "Orders from this market for the quarter were lower than any level that we have seen since before our acquisition of Spectra-Physics in 2004," he commented.

Sales to the solar manufacturing sector also declined in the quarter, although Phillippy said that this was down to the turbulent financial conditions causing an over-supply of solar panels, rather than a fall-off in underlying demand.

"We have moved aggressively to reduce our operating costs and to strengthen our balance sheet," he concluded. "We are weathering this challenging business climate, while building on our strong brand equity, deep talent pool, market diversification and strong intellectual property portfolio. We firmly believe that Newport will emerge from the current economic downturn with an enhanced leadership position in the photonics industry."