Spansion Reports Sharp Drop in Quarterly Earnings; Stock Slumps
Flash memory maker Spansion reported a first-quarter loss of 46% due to intense price competition, and announced large scale cost-cutting measures.
The company posted a quarterly loss of $75.5 million, or 56 cents a share, compared with a net loss of $52 million, or 40 cents a share, in the prior year. Revenue increased 12% to $628 million, from $562 million a year ago.
Analysts surveyed by Thomson Financial expected a loss of 24 cents a share on revenue of $678 million.
Spansion said it will implement "large scale cost-cutting measures" in response to the competitive pricing environment, including the sale of non-performing assets and the consolidation of some operations. The company said its goal is to reduce 2007 planned expenses by about $50 million to $100 million.
The company said it is not providing specific second-quarter guidance due to market conditions.
Spansion was previously a joint venture of Advanced Micro Devices and Fujitsu spun off in December 2005.