YAVNE, ISRAEL -- Orbotech swung to a second-quarter loss as expenses from an ongoing investigation into alleged IP theft at its Korean subsidiary coupled with lower equipment demand sunk the inspection equipment maker.

For the quarter ended June 30, the GAAP net loss was $800,000, down from net income of $1.6 million for the first quarter and net income of $18.9 million last year.

Revenues were up 1% sequentially and down to 34% year-over-year to $101.3 million. or $0.48 per share (diluted), in the second quarter of 2011.

Sales of printed circuit board processing and inspection equipment were $48.6 million, flat sequentially but down 17.2% from the second quarter 2011.

Orbotech took $2.3 million worth of expenses during the quarter related to an ongoing investigation into alleged theft of customer secrets, and expects to continue to incur additional expenses for at least the remainder of 2012. The AOI and LDI maker's Korean subsidiary and six local employees have been indicted in Korea, and the investigations continue both in and outside Korea. The workers allegedly stole OLED secrets from customers LG and Samsung and sold them to BOE and others.

Orbotech reiterated its guidance of $430 million to $450 million in sales for the year.

"We believe that global consumer demand for advanced mobile devices will create strong business conditions for Orbotech in the latter part of 2012 and in 2013," chief executive and president Rani Cohen said, “After a somewhat slow start to the year, in recent weeks we are seeing increased order activity related to our PCB equipment, in particular related to direct imaging systems for touch-screen manufacturers, after the end of the quarter. In addition, FPD manufacturers are beginning to report higher levels of planned capital expenditures, which we believe will translate into new orders in the next few months."

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