International Rectifier shares tumble on 4Q loss
NEW YORK (AP) — Shares of International Rectifier Corp. tumbled Thursday, after the semiconductor maker posted a $68.2 million loss for the fourth quarter, weak revenue guidance for the current quarter and announced plans to restructure its manufacturing operations.
THE SPARK: The El Segundo, Calif.-based company's loss amounted to 99 cents per share for the three months ended June 24. That compared with a profit of $39.6 million, or 55 cents per share, in the 2011 fourth quarter.
The recent quarter's results included a variety of restructuring and other charges totaling 81 cents per share. Excluding those items, the company posted an adjusted loss of 18 cents per share.
Revenue fell 15 percent to $269.7 million from $317.2 million.
Analysts, on average, expected a loss of 15 cents per share on $261.9 million in revenue, according to FactSet.
THE BIG PICTURE: The company blamed the disappointing results on weak demand from its customers. Given that and the current economic environment, the company said it will close its fabrication plant in El Segundo, Calif., by the end of March. The move should save the company about $10 million per year when completed.
In addition, International Rectifier said it will "resize" another fabrication facility in Wales, which will take place in several stages through mid-2015. The company said it's in the process of finalizing those cost-cutting moves.
For the current quarter, International Rectifier said it expects its revenue to total between $235 million and $250 million, below analysts' predictions of $274.2 million.
THE ANALYSIS: Raymond James analyst J. Steven Smigie said the company saw weakness as the quarter progressed, just like its peers. The company is working through the macroeconomic weakness, Smigie said, and investing heavily in some businesses while restructuring. The investments and trends in the industry should be a benefit in the long term, but shares will likely be volatile in the short term, he said, keeping a "Market Perform" rating on the stock.
THE SHARES: Down $2.20, or 11.9 percent, to end Thursday at $16.27 in heavy afternoon trading, after falling as low as $16.24 earlier in the session. Over the past 52 weeks, the company's shares have traded between $16.14 and $25.07.