UPDATE 2-GT Advanced to cut 25 pct of workforce, shares plunge

Oct 31 (Reuters) - GT Advanced Technologies will slash about 25 percent of its global workforce, the Solar and LED equipment maker said, adding that third-quarter revenue is likely to be at the low end of its forecast because of weak demand in Asia.

Shares of GT Advanced, whose machines are used by others companies to manufacture solar-cell and LED ingredients, fell nearly 20 percent to a five-month low of $4.11 on Wednesday on the Nasdaq.

The equipment manufacturer, which will report results on Nov. 6, said revenue would be at the low end of its $110 million to $140 million forecast. Analysts on average were expecting third-quarter revenue of $125.4 million, according to Thomson Reuters I/B/E/S.

GT Advanced, which had 663 full-time employees and contract workers as of March 31, expects to save about $13 million annually from the job cuts.

It will take a related restructuring charge of about $4.2 million in the fourth quarter.

``The headcount reduction announced today is on the steeper side of what we would have expected, but it is not surprising,'' said Raymond James analyst Pavel Molchanov.

``Both of its businesses are experiencing cyclical problems due to excess capacity - solar as well as LEDs (light-emitting diodes),'' he said.

GT Advanced also said it would consolidate its existing business units -- photovoltaic, polysilicon and sapphire -- into a single group called crystal growth systems.

The restructuring comes as the company's solar customers struggle with weak demand and tight financing.

``It is becoming increasingly clear that some of our Asian customers are experiencing severe financial difficulties brought on by a number of economic and trade-related challenges,'' Chief Executive Tom Gutierrez said in a statement.

Asia contributed 95 percent of the company's revenue of $955.7 million for the fiscal year ended March 31.

Chinese solar companies have been battered by a steep fall in prices for solar equipment. They have also been slapped with import duties in the United States and face similar action from the European Union.


The company said it expects a turn-around in the solar industry in the long term, driven largely by the adoption of new technologies that will help cut costs.

GTAT also said it expects renewed growth in the LED market as general lighting adoption accelerates. However, 2013 would be a challenging year, it said.

``We also remain optimistic about the opportunities in our sapphire business for emerging applications such as the mobile cover and the touchscreen markets,'' CEO Gutierrez said.

GTAT has repeatedly spoken about being able to use sapphire, currently used in LEDs, as a replacement for glass in mobile phone screens.

Analyst Molchanov said the company remained one of the most profitable in the clean tech sector.