ADC Telecommunications (ADCT) – Buzz Stock of the Day

Posted on Wednesday, August 12th, 2009

Shares of network equipment maker ADC Telecommunications (NASDAQ: ADCT) jumped nearly 25 percent in morning trading on Wednesday after the company raised its earnings forecast for the July quarter and said it plans to cut more costs by expanding its global restructuring.

ADC said it expects third-quarter per-share earnings of between $0.05 and $0.10 on revenue of around $280 million, which is higher than the company’s previously forecasted range of a loss of $0.04 per share and earnings of $0.04 cents a share, on revenue in the range of $265 million and $290 million.

“Today’s announcement is a reflection of our ongoing strategic commitment to managing through the global recession, taking actions to transform our business and strengthening our competitive position,” Chief Executive Robert E. Switz said in a statement.

The better-than-previously expected projections were largely due to reducing the company’s workforce by 400 jobs, compared to the 100-130 layoffs originally stated. In June, ADC announced plans to cut jobs in Europe, the Middle East and Africa. On Wednesday, the company said it has increased the downsizing to include the United States, Latin America and Asia.

The new total represents about 4 percent of ADC’s total workforce, and is part of a company-wide restructuring plan that will cost the company between $24 million and $34 million.

The company, which has been hit hard by the recession, suffered a loss of $0.11 per share for the quarter ending May 1, compared to earnings of $0.14 per share for the same quarter last year.

ADC said in a statement that the efforts made over the past year to realign business operations are expected to continue improving the Minnesota-based company’s near term financial performance as well as increase long-term earnings potential.

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