General Semi Updates Business Outlook
General Semiconductor Inc. (Melville, NY) has updated its business outlook for the fourth quarter and fiscal year 2001. As a result of the recent softness in order trends, including some customer cancellations and push-outs, fourth quarter revenues are expected to be 5 to 7 percent below third quarter revenues of $130.5 million. Diluted earnings per share for the fourth quarter are expected to be in the range of $0.26 to $0.28.
The company believes that the softness in order trends is a result of an increased level of inventory at distributors and several OEM customers, due in part to moderating growth rates in the computer, telecom and automotive end markets. As a result of this inventory buildup and the normal seasonal weakness resulting from the Chinese New Year, revenues for the first quarter of 2001 are expected to be sequentially flat. Sequential earnings per share for the first quarter are expected to be flat to 8 percent lower.
Fiscal year 2001 revenues are expected to increase 14 to 16 percent over 2000, with diluted earnings per share expected to rise by 20 to 25 percent when compared to 2000. New products are expected to account for 12 to 13 percent of 2001 revenues compared to 6 percent of 2000 revenues.
“Although 2000 will be a record year for our company, we are disappointed that we must lower short term expectations for revenues and earnings. Our continued focus on developing new power management products should sustain our long term growth prospects," commented Ronald A. Ostertag, chairman and CEO. “We believe that the current inventory adjustments occurring at our major distributors and certain OEMs should begin to ease in the first quarter of 2001 and we will be back on track for another record year."