Corning Restructures Photonics Unit
CORNING, N.Y., July 11 -- Corning Inc. plans to lower the cost structure of its Photonic Technologies business in response to weakening demand for its components and modules. The plan includes the closing of three manufacturing facilities and related workforce reductions of 1000 employees. The cost of this plan will be included in Corning's third quarter results.
Corning also said that its second quarter results will include pre-tax charges totaling approximately $5.1 billion to reflect the impairment of goodwill and other intangible assets related to recent Photonic Technologies acquisitions and the write-off of excess and obsolete inventory.
"With the dramatic reduction of infrastructure spending across the telecommunications industry, and our expectation that this market downturn could last 12 to 18 months, we are taking decisive action to lower costs and improve the future profitability of our Photonic Technologies business," said John Loose, president and CEO. "Our Photonic Technologies business grew 75 percent to 100 percent per year for the past three years, and we originally anticipated similar growth again this year. As a result, we added significant capacity and fixed costs to meet expected market demand that has not materialized. We now expect sales this year in the range of $600 million to $700 million for this business, with significantly lower sales of optical amplifiers and other photonic components."
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