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Orbotech Reports 2007 Q1 Results
Written by Tracy Heffner
Monday, 07 May 2007
YAVNE, Israel – Orbotech Ltd. announced its consolidated financial results for the first quarter ended March 31, 2007.
Revenues for the first quarter of 2007 totaled $86.1 million, compared to the $101.4 million recorded in the first quarter a year ago. Net income for the first quarter of 2007 was $5.6 million compared with net income for the first quarter of 2006 of $14.1 million.
Sales of equipment to the PCB industry relating to bare PCBs were $35.5 million in the first quarter of 2007, compared to $40.8 million in the fourth quarter, and $41 million in the first quarter, of 2006. Sales of flat panel display (FPD) inspection equipment were $19.1 million, compared to $27.8 million in the fourth quarter, and $30 million in the first quarter, of last year. Sales of equipment to the PCB industry relating to assembled PCBs were $6.8 million, compared to $8.5 million in the fourth quarter, and $9.2 million in the first quarter, of last year. The company completed the quarter with cash, cash equivalents and marketable securities of approximately $236 million, compared with approximately $270 million at the end of 2006. The weakening U.S. dollar resulted in a reduction in net income of approximately two cents per share compared with the fourth quarter of 2006; and, if the Sheqel-dollar exchange rate remains at current levels, can be expected to result in an additional reduction in net income of approximately three cents per share in the second quarter.
While overall revenues from the company's PCB business experienced a temporary decline this quarter, the company continues to benefit from high levels of demand for its Paragon direct imaging system, and recognized revenue from a record number of systems this quarter. The sustained success over the long term of the company's Discovery PCB-AOI system has continued to reinforce Orbotech's leadership position in the PCB industry.
The decrease in revenues from sales of FPD products was said to be the result of a significant reduction in the level of capital investment by LCD manufacturers, a trend that is expected to continue throughout 2007. However, based on the continuing, very strong demand for LCD televisions, the company believes that capital expenditures by LCD manufacturers should pick up towards the end of 2007 and in 2008.
Commenting on the results, CEO Rani Cohen said, "As we expected, our first quarter operating results mark the beginning of a challenging year. Nevertheless, we remain optimistic as to the long-term demand for our principal products, and confident that our ongoing emphasis on research and development, together with our strong balance sheet, continue to lay a sound foundation for future growth."
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