General Semiconductor revises 4Q outlook

Melville, New York–General Semiconductor, Inc., a manufacturer of power management devices, today updated its business outlook for the fourth quarter (4Q) and fiscal year 2001. As a result of recent softness in order trends, including some customer cancellations and push outs, 4Q revenues are expected to be 5 to 7% below third quarter reported revenues of $130.5 million. Diluted earnings per share for the 4Q are expected to be in the range of $.26 to $.28.

The softness in order trends is a result of an increased level of inventory at distributors and several OEM customers, according to the company, 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 Lunar 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% lower.

Fiscal year 2001 revenues are expected to increase approximately 14 to 16% over 2000, with diluted earnings per share expected to rise by 20 to 25% when compared to 2000. New products are expected to account for 12 to 13% of 2001 revenues, compared to 6% 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 chief executive officer. “We believe that the current inventory adjustments occurring at our major distributors and certain OEM’s should begin to ease in the first quarter of 2001 and we will be back on track for another record year.”


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