UPDATE: Oce Shares Fall On Wider 3Q Loss, Challenging Mkts
02 October 2009 - 7:49PM
Dow Jones News
-Shares in Oce NV (OCE.AE) plummeted Friday, after the printer
maker posted a wider third-quarter net loss on continuing weak
sales, and said it will cut costs further with markets set to
remain fragile.
Oce's business is under pressure as some of its key markets,
such as the construction and manufacturing sectors, continue to
decline due to the recession. As a result, the "equipment sales
environment remained weak and print volumes were still under
pressure throughout the print industry", the company said in a
statement.
Oce didn't provide a detailed outlook, but said "markets will
remain challenging" in coming months.
However, the financial sector in the U.S., another important
market for Oce, shows some signs of recovery, financial chief Hans
Kerkhoven told television news channel CNBC. "We're seeing the
first green shoots there and orders are coming in from banks and
insurers."
Oce reported a net loss for the third quarter of EUR25.7
million, from EUR23.7 million a year earlier, mainly the result of
declining sales and restructuring costs. Revenue declined 10% to
EUR631 million, lower than analysts' expectations for EUR651
million.
Although sales continued to plummet, Oce said it outperformed
the printing industry, in which revenue declined by 19% on average
in the first half of this year.
Oce's main competitors are U.S.-based Xerox Corp. (XRX) and
Japan-based Canon Inc.(CAJ).
Still, at around 0850 GMT Oce shares traded 5.6% lower at
EUR4.09 on a broadly lower midcap market in Amsterdam.
To offset declining sales, Oce is pushing an aggressive
restructuring program. It expects to exceed its cost-savings target
for 2009 and expects to make more job-cuts than previously
announced, Chief Execeutive Van Iperen told Dow Jones Newswires.
"Our restructuring program is ahead of schedule", he said.
In June, the company already raised its cost-savings target for
2009 to EUR124 million from EUR80 million and said it wanted to cut
1,500 jobs this year.
Van Iperen declined to say by how far he expects to exceed these
targets.
"It is clear that markets are and will remain weak for some time
to come", Petercam analyst Eric de Graaf said. "Océ is barely able
to keep up with its cost reductions, but the cash situation is
improving, limiting the stress level." De Graaf rates Oce at
hold.
Company Web Site: www.oce.com
-By Maarten van Tartwijk; Dow Jones Newswires; +31-20-5715-200;
maarten.vantartwijk@dowjones.com