News
ESPOO, FINLAND – Elcoteq's second-quarter net sales totaled 436 million euros, down 7% sequentially and 52% year-over-year.
The operating loss was 11.5 million euros, compared to an operating loss of 38.3 million euros in the first quarter, and operating income of $600,000 last year. Personal communications contributed 59% of the firm’s net sales, with home communications making up 16% and communications networks 25%.
Personal communications' net sales have decreased from last year mainly due to manufacturing reallocation decisions made by Nokia, says Elcoteq.
As previously reported by CIRCUITS ASSEMBLY, Elcoteq plans to sell the majority of the machinery, equipment and materials of its Tallinn, Estonia, manufacturing operations to Ericsson. The agreement includes the transfer of the lease agreement. The transaction value is approximately 30 million euros. The deal includes 1,200 of Elcoteq's 1,600 employees in Tallinn.
Third-quarter net sales are expected to decrease slightly sequentially, due to the partial Tallinn business transfer to Ericsson.
1 euro = US$1.4243
TISZAUJVAROS, HUNGARY – Jabil Circuit will hire 600 to 700 workers at its plant here as demand for new products ramps, according to a local paper.
Zoltan Kiraly, CEO of Jabil’s Hungarian unit, told the newspaper the firm might hire even more employees next year.
Jabil had laid off 900 at the site in February as orders fell.
In a press release today, Elcoteq said it would receive the cash from Kaifa, part of China Electronic Corp., in exchange for an undetermined number of shares. The deal would make CEC its largest shareholder, with a stake of at least 30%. The total size of the investment depends on the successful restructuring of Elcoteq's debt, with a final agreement expected to be signed in the third quarter.
The world’s sixth largest EMS company at the end of 2008, Elcoteq’s second-quarter sales dropped more than 50% to 436 million euros and the company posted an operating loss of 11.5 million euros in the second quarter. It was hurt by Nokia’s decision to build products in-house for the foreseeable future.
CEC has been Elcoteq's joint-venture partner in China since 2002. .
