Circuits Assembly Online Magazine - Viasystems' Profits Still Trailing Sales Recovery

ST. LOUIS -- Viasystems Group's Assembly segment had sales of $42.6 million, up from $31.9 million a year ago, but the operating loss rose to $3.9 million from $1.1 million last year. Demand was soft across the company's computer and datacommunications end-market and in certain telecommunications projects.

The firm announced an overall first-quarter net loss of $9.4 million, an improvement from a year ago when the PCB fabricator/EMS lost $13.3 million.

Net sales were $295.9 million for the quarter ended March 31, up 8.4% year-over-year and down 2.5% sequentially on higher demand for printed circuit boards for automotive and telecommunications applications and a broad recovery in electromechanical solutions. Operating income was $5.5 million, up from $2.6 million a year ago.

"While the markets we serve did not demonstrate any significant strength, and in some instances declined both year-over-year and sequentially, we were able to generate net sales and earnings in line with our first quarter expectations," said Viasystems' CEO David Sindelar. ‟It is difficult to draw many trend conclusions from our results as they were impacted by very weak demand leading up to the Chinese New Year holiday period, which was compounded by the effects of production shutdowns during the holiday period. Nonetheless, one conclusion that is clear is that our Assembly segment continues to struggle to find an optimum cost base in this period of inconsistent demand."

Automotive, telecommunications, and military and aerospace sectors performed as expected, the company said. There was broad softness in demand from the computer and datacommunications end-market.

The PCB maker forecast sequential and year-over-year sales growth for the June quarter, and expects to see almost a full point of sequential gross margin improvement compared to its consolidated first quarter result.

Net sales and operating income in the company's PCB segment were $253.3 million and $9.4 million, respectively, compared with $241 million and $3.7 million, respectively, for the first quarter 2013. In the year ago quarter, the company was still recovering from a September 2012 fire at its factory in Guangzhou, China.