Harris warns of earnings drop
The firm joins a growing list of chipmakers by warning that it expects its earnings to be about 10 percent below analysts' estimates.
"The semiconductor market has continued its unprecedented downturn and has been joined by general market weaknesses that started in Asia, but have now spread to Russia, eastern Europe, and South America," said Harris chairman and CEO Phillip Farmer in a statement. "For Harris, the impact is now being felt in communications businesses as well as semiconductor, primarily in the form of decreasing prices and, to a lesser extent, in demand."
The company warned that it expects its first quarter earnings to be about 10 percent below the analysts' consensus estimate of 58 cents per share. Harris also expects total year operating results to likely follow the same pattern--slightly below fiscal year 98 results and about 10 percent below the analysts' consensus estimate of $3.12 per share.
Shares of Harris closed yesterday at 37.06 and have reached as high as 55.31 and as low as 31.88 during the past 52 weeks.
Yesterday, another semiconductor maker Aetrium warned of lower-than-expected earnings, joining, among others, NEC, Asyst, and LSI Logic to do so. Intel is one of the only companies that expects better-than-expected earnings.
Harris also announced that it plans to take a reserve against first quarter earnings to reflect the potential settlement of a lawsuit. A Federal Circuit Court of Appeals recently upheld a lower court ruling that Harris had infringed upon a competitor's patent for an analog television transmitter circuit. The award totaled $15.4 million plus attorneys fees and interest and relates to an older product no longer manufactured by Harris. Harris continues to maintain that no infringement took place and is evaluating what further actions it may take.