PORTLAND, OR – Electro Scientific Industries reported revenue for its fiscal second quarter ended Oct. 1 was $29.7 million, down 36.1% year-over-year and 38% sequentially.

The GAAP net loss was $9.7 million, compared to a net loss of $100,000 in the prior quarter. The operating loss was $9.9 million, compared to income of $300,000 last quarter.

“Our second quarter was challenging for ESI, with short-term overcapacity in our core business resulting in sequentially lower revenues, earnings, and cash flow,” said Michael Burger, president and CEO of ESI.

Orders in the fiscal second quarter were $28 million, down 45.6% year-over-year and 7.9% sequentially.

“The demand environment continues to be challenging in fiscal 2017, with year-to-date bookings down 37% from a year ago,” Burger said. “As we expected, capital spending in the flex via drilling market remained low during the quarter. Nevertheless, we added three new flex customers, and we expect to see improvement in flex before the end of the fiscal year. Further, our Micromachining division has begun to see traction with improved quote and design-in activity. Lastly, our Visicon acquisition is beginning to produce new business opportunities, as customer interest in a laser solution with integrated verification is growing.”

Revenues for the fiscal third quarter are expected to be approximately flat with second quarter levels.