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ADC cuts 2,500 more jobs
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August 1, 2001: 11:53 a.m. ET
Telecom equipment maker says it will miss 3Q EPS, revenue forecasts
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NEW YORK (CNNfn) - ADC Telecommunications Inc. said Wednesday it is cutting another 2,500 jobs and said its sales and earnings in the latest quarter will miss its previous forecasts as a slowdown in capital spending continues to hurt the networking equipment maker.
Minneapolis-based ADC, which makes systems that speed broadband data transmission, said it expects to post a loss of about 5 cents a share for its third fiscal quarter, ended July 31. Wall Street analysts expected ADC to lose 4 cents a share, according to earnings tracker First Call.
ADC also said revenue for the quarter won't meet the $600 million it previously forecast. Like others in the telecom-equipment market, ADC has suffered from reduced capital spending by telecommunications service providers during a year-long economic slowdown.
"Our customers continue to hold their capital spending to levels below those of the prior year, and we are currently seeing few commitments to increased spending near term," CEO Rick Roscitt said. "Given the slow industry-wide recovery of revenue growth, we do believe that it is prudent to remove additional costs from our operations in the fourth quarter and beyond."
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The 2,500 job cuts will be in addition to the 7,000 ADC has cut since November.
The company, which employs more than 22,000, said the job cuts and other cost-cutting measures -- including the sale of some product lines and the closure of some facilities – will save it about $200 million a year.
In one such measure, ADC agreed Wednesday to sell its Access Products division and Broadband Wireless Group to private equity group Platinum Equity LLC.
ADC (ADCT: down $0.03 to $4.88, Research, Estimates) shares fell in early trading Wednesday and are far below their 52-week high of $47.25. 
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