Cabot Microelectronics revises 3Q estimate

Globe Newswire

AURORA - Cabot Microelectronics Corp. said the company expects to report revenue of approximately $97 million, gross profit margin of approximately 50 percent of revenue, and diluted earnings per share of approximately 39 cents for the third quarter of 2015. The results include approximately $1.4 million of costs related to certain raw material that does not meet the company's quality requirements, and a higher effective tax rate compared to the same quarter last year, primarily related to jurisdictional mix of earnings.

The combined effect of these is an adverse impact to diluted earnings per share of approximately $0.07.

"Our preliminary financial results for the quarter reflect soft industry demand conditions, consistent with what we described when we reported results for our second fiscal quarter in April, and also in line with reports by some of our strategic customers," said David Li, president and CEO of Cabot Microelectronics. "Our results were also impacted during the quarter by our decision to write-off certain inventory that relates to raw material we have determined does not meet our quality requirements. In alignment with our demonstrated commitment to meeting our customers' quality and performance expectations, we absorbed the additional cost."

Mr. Li noted that despite the issuues, the company is raising full fiscal year guidance for gross profit margin to a range of 50 to 51 percent of revenue.

"We believe that our business fundamentals remain strong, and we intend to continue to profitably grow our business over the long term," Li said.