Corning posted 3rd quarter net loss amid restructuring and slumping revenue that stretched across entire company from telecommunications to CRTs. Glass maker, which increasingly has relied on optical fiber and components related to telecom to drive its business, said it had net loss of $220 million, down from year-earlier net income of $254 million. Revenue plunged 21% to $1.51 billion. It said latest results involved $339 million pretax charge that included $236 million for writing down fixed assets in closing plants related to telecom business in North Wales, U.K., and Henrietta, N.Y. Charge also covered layoffs that are expected to affect 12,000 employees by end of year. Restructuring will yield $400 million in annualized savings, Corning said.
David Nagel, who was lured from AT&T to head Palm’s new operating system (OS) subsidiary, will receive $620,000 starting salary and $200,000 hiring bonus, said letter in recent SEC filing. Palm in July announced plan to separate OS business as subsidiary and letter outlined steps being taken to accomplish that, including possible spinoff. “The separation process may include legal separation, third party investments by strategic partners, sub-IPO and spinoff,” Palm said. Nagel also will get restricted stock grant in Palm shares along with options to buy 6.5% of shares in Palm OS business once it has made subsidiary late this year. Grant of 50,000 shares will vest in 2 years, but will “accelerate” after first release of Palm OS based on StrongArm processor, Plam said. ARM-based OS is expected to be released in 2002 and company has said project remains on track.
Electronic Arts became pilot customer of Kontiki, company that offers secure network for delivering digital media files over Web. Kontiki said its network allowed its customers to deliver entertainment and other TV-quality content direct to users’ PCs. Other pilot customers of Kontiki include Amazon.com, LivePlanet, MP3.com, Palm, Sony Pictures Entertainment, TiVo, Verisign. Companies said Kontiki services might dramatically lower their cost of sales, marketing, training and travel, while increasing revenue and customer royalty. Preview of pilot network is available by downloading Kontiki at www.kontiki.com. Following pilot period, first production release of Kontiki Delivery Network is expected later in 4th quarter.
TiVo signed new 7-year worldwide licensing agreement with Sony that’s forecast to generate $10-$15 million in incremental revenue for TiVo in next 12 months, CEO Michael Ramsay said.
XM Satellite Radio Thurs. carried through with earlier announced plans to expand commercial service across southern half of U.S. and announced agreement on $66 million financial package that company said would be sufficient to fund operations “deep into” 2nd quarter of 2002.
Toshiba-Matsushita joint venture for buying CRT components and materials will consist at outset of 10 employees and will start with purchasing glass, company said. Venture, expected to debut in April, will handle 40% of companies’ combined procurement needs for CRTs, estimated at $1.6 billion annually, company said. Each company has 6 factories that will work with joint venture, which is expected to focus on Japan market at start.
SanDisk revealed it would be cutting 15% of its staff as it tried to return to profitability, reduce product costs, minimize operating expenses. SanDisk CEO Eli Harari said job cuts would come once all card assembly and test manufacturing operations were transferred offshore “by the end of the current quarter.” Announcement came as Sunnyvale, Cal., flash memory data storage supplier said revenue dropped 39% to $65.9 million in its 2nd quarter ended Sept. 30 from $107.1 million in same quarter year ago. SanDisk posted $170.5 million loss (-$2.50 per share) compared with $25.6 million profit (38?) year ago. Harari said “pricing pressures accelerated during the quarter due to continuing excess supply.” He said that while sellthrough in retail channel “was strong in the first 2 months of the quarter,” it fell off “sharply in the weeks after the events of September 11.” Although company saw improvement “in recent weeks,” he said it was “too early to say if retail sales in the 4th quarter will meet our previous expectations for the holiday season.” Company announced earlier this week it had filed patent infringement suit against Boise, Ida.-based Micron Technology. SanDisk accused Micron of “infringement of a fundamental solid state flash memory system patent” held by it -- U.S. patent 6,149,316 ("Flash EEPROM System"), issued Nov. 21, 2000. On more positive note, SanDisk said Targa Electronics storage systems equipped with SanDisk flash memory cards were being used in growing number of U.S. military helicopters, jet fighter planes, bombers.
Best Buy customers who buy cable modem and sign up for Comcast Internet service through Nov. 15 can qualify for Comcast promotional incentives through year-end, companies announced Thurs. In expansion of partnership agreement, customers at more than 60 Best Buy stores in Comcast’s service area can use kiosks to check service broadband availability to their home and sign up for service. Best Buy customers in N.J. and Pa. can order Comcast digital cable TV service in stores’ DTV display areas. Latter will be available in 12 stores at start, but will be expanded in broader rollout in coming months, companies said.
Agreement to work with consumer electronics, broadcast and auto industries on drafting open platform for standardizing data delivery applications of in-band, on-channel (IBOC) DAB was announced by iBiquity Digital and Impulse Radio. Announcement was made at Digital Radio Wireless Data Conference in Detroit Tues. Pat Walsh, iBiquity vp-business development for wireless data services, said major IBOC benefit was opportunity for radio systems to generate additional revenue by delivering data services to complement regular audio programming. Walsh said company believed that consumers would view new IBOC data services “as valuable upgrades to today’s radio.”