Newport sees Q4 earnings above forecast range

Newport said it expects its fourth-quarter earnings to exceed its prior forecast range of 16 cents to 20 cents a share, helped by a partial reversal of a valuation allowance.

The company expects revenue for the quarter to be at or slightly above the high end of its forecast range of $110 million to $115 million, as it gained from higher new orders, it said in a statement.

Analysts on average expect the company to post a fourth-quarter to be between the $128 million and $130 million, exceeding its previous expectation of about $110 million to $115 million.

Newport said it will record a credit to its tax provision of about $15 million to $20 million to reverse a part of the valuation allowance against its defered tax assets.

This was partially offset by the charges to cost of sales of about $2.5 million to $3.5 million during the quarter, primarily due to an inventory adjustment in its lasers division, it said.

These charges will hurt its gross margin, which will fall below its previously forecast range of 40 percent to 42 percent, it added.