Orbotech Ltd. (Nasdaq: ORBK) has further cut its full-year guidance for 2012, citing the current economic environment. Orbotech predicts $98 million revenue for the third quarter, and cut its full-year guidance to $400 million from $430-450 million.
In late June, Orbotech cut its 2012 revenue guidance to $430-450 million from $500 million, 20-24% less than its $565 million revenue in 2011. It attributed the lower guidance to weakness in the flat panel display market, which it predicts will continue through the first half of 2013. The company also suffered from a scandal in Korea, involving technology leaks by Orbotech technicans at television makers LG and Samsung to Chinese companies.
Today, Orbotech said, "Despite strong sales activity during the month of July, third quarter revenues from sales of equipment to the printed circuit board (PCB) industry were significantly lower than anticipated. While PCB plant utilization levels - particularly for high-end PCB products - continue to improve, PCB customers have deferred capital expenditure decisions citing uncertainty in overall global economic conditions."
It added, "In addition, as previously disclosed, the low level of capital spending in the flat panel display (FPD) industry is expected to continue throughout 2012 and into the first half of 2013. Lead times for delivery of the company’s FPD products have become shorter, which has also reduced the visibility into the Company’s expected business."
Orbotech said that given the changes in business conditions, it was "adopting certain measures designed to realign its infrastructure, while at the same time continuing to invest in R&D programs to enhance future growth and improve its technological leadership, and improving its worldwide customer service and support infrastructure."
Orbotech's share price promptly fell 12.2% in premarket trading to $7.90 on the news, giving a market cap of $350 million.
Published by Globes [online], Israel business news - www.globes-online.com - on October 9, 2012
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