Orbotech plummets on revenue warning

Orbotech cut its 2012 revenue guidance to $430-450 million from $500 million.

Orbotech cut its 2012 revenue guidance to $430-450 million from $500 million, 20-24% less than its $565 million revenue in 2011.

Orbotech, a manufacturer of automated inspection equipment for printed circuit boards and flat panel displays, attributed the drop in revenue to weakness in the flat panel display market, which it predicts will continue through the first half of 2013.

This weakness comes on top of the scandal in Korea, which the company expects will affect its bottom line. Reports state that the Korean policy are investigating technology leaks at television makers LG and Samsung to Chinese and Korean companies.

Indictments have been filed against the employees suspected of the sale of the information. The indictments state that Orbotech employees photographed OLED technology circuits for 55-inch televisions during visits to LG and Samsung factories to fix problems in Orbtech's inspection equipment. They kept the pictures on USB drives they concealed in belts or shoes, and then sold to Chinese screen manufacturer BOE and other companies.

Orbotech said today, "The company has recorded legal and other expenses in connection with the previously announced investigation in Korea in the second quarter and expects to record additional expenses in the second half of the year. As a result of this and the revised revenue expectations discussed above, the company is withdrawing all of its previously announced 2012 earnings per share guidance, which should no longer be relied upon."

Orbotech has 1,750 employees, 630 in Israel, and most of the rest in China and elsewhere in the Far East.

Published by Globes [online], Israel business news - www.globes-online.com - on June 28, 2012

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