Chip manufacturing equipment company Applied Materials said Monday it expects to report falling revenue during the first quarter of 2009 as it battles declining demand for semiconductor and display products.
Applied Materials said it expects revenue for the quarter ending Jan. 25 to be approximately US$1.33
The company now expects a loss in the range of $0.09 to $0.11 per share for the first quarter, a drop from its forecast in November, when it expected a result between breakeven and a $0.04-per-share loss. The revised target reflects charges that could not be determined during the earlier projections, the company said.
The company said it expects to take a restructuring charge of $133 million related to a cost-reduction program announced in November that would provide annualized cost savings of $400 million. The company said it would restructure operations and lay off 12 percent of its workforce, or 1,800 positions, by the end of fiscal 2009 through attrition or voluntary separation.
The company is also provisioning a charge of as much as $48 million to account for revenue it billed but may not receive from customers who are struggling in the challenging economic environment, Applied Materials said. The company also expects to take an inventory charge of $20 million due to a drop in demand for semiconductor and display products.
Applied Materials "intends to continue implementing cost-reduction programs, including shutdowns and additional restructuring activities, as appropriate for the unprecedented business conditions," the company said.
The company provides equipment for the fabrication of semiconductor chips, flat panel displays and solar cells. Its struggles come as a number of chip vendors cut costs in response to the economic downturn. Intel, Advanced Micro Devices and Texas Instruments have all cut jobs in recent weeks. Intel in January also announced it would shut down four manufacturing plants.