Marconi posts ‘modest’ Q2 2002 operating loss

Marconi announced today that its core business--equipment and components used in optical networks, packet switching and broadband access, as well as software and support services--posted a “modest” operating loss for the second quarter 2002, which ended September 30.

Sales for the quarter were $1.3 billion (893 million British pounds), a 33% decline compared to the previous year, as orders fell 33% for the period. However, sales for the second quarter were more than the $1.0 billion (688 million pounds) posted in the first quarter, which the company attributed to the “seasonality of its business.”

Marconi achieved a 12% reduction in operating costs for its core business for the quarter, as another 630 employees left the company as part of its cost-reduction plan, bringing to 6600 the total of jobs lost since April 1. Nevertheless, this action was not enough to restore profitability to the core for the quarter.

A spokesman for Marconi said details on the operating loss would be revealed on Nov. 11. However, the company did post an operating cash flow for the quarter of $120.5 million (83 million pounds).

Marconi also announced that its net debt had dropped below $6.2 billion (4.3 billion pounds) as of Sept. 30, and that it is on target to reduce its debt to a range between $3.9 billion and $4.6 billion (2.7 billion pounds and 3.2 billion pounds) by the end of the 2002 fiscal year, which ends March 31, 2002.

--Glenn Bischoff, senior news writer