Here is a look at more of Thursday's top business stories:
Ciena posts $612.2 million loss
LINTHICUM, Md., May 23 (UPI) -- Optical networking company Ciena Corp. said its second-quarter net loss widened to $612.2 million, or $1.86 a share due to a restructuring charge and lower spending by its telephone carrier customers.
The company posted a net loss of $50.7 million, or 17 cents a share during the same period last year.
Revenues for the quarter ended April 30, dropped to $87.05 million from $425.4 million a year ago.
Ciena took a restructuring charge of approximately $121.4 million, associated with workforce reductions, lease terminations, non-cancelable lease costs and the write-down of certain property, equipment and leasehold improvements.
During the latest quarter, the company also recorded an income tax provision of $148.0 million. This provision consisted of an income tax benefit of $157.8 million on net loss for the quarter, offset by a $305.8 million non-cash charge to establish a valuation allowance against its gross deferred tax assets. In addition, Ciena also recorded a charge of approximately $223.2 million, primarily related to excess inventory associated with its long-haul transport products and purchase commitments with suppliers.
Gary Smith, president and chief executive officer, said, "The restructuring efforts we made in February and in March dramatically reduced Ciena's operating expenses and overhead costs, and we expect to see additional benefit of those actions in our financial results for our fiscal third quarter.
"In the last several quarters, Ciena has taken steps to realign itself with a dramatically changed telecom environment. The unusually large inventory-related charge we've taken in this quarter was a necessary part of that realignment although it had a significant negative effect on the quarter's results," Smith said.
Looking ahead, Smith said, "We're optimistic that the telecom industry will soon see the worst of this downturn, but continued uncertainty surrounding service providers' near-term spending and deployment plans makes it impossible to call a bottom with any certainty.
"At this point we expect that Ciena's fiscal third quarter revenue, without taking into account any revenues from ONI after we complete the deal, will be flat to down from second quarter levels," he added.
Avon to phase-out Suffern plant, hikes R&D spending
NEW YORK, May 23 (UPI) -- Cosmetics maker Avon Products Inc. said it will increase its research and development spending by more than $100 million over the period 2002 through 2005.
Avon also announced a realignment of its U.S. manufacturing operations that will result in the phase-out of its Suffern, N.Y., manufacturing over the next 12 months.
Avon said the increase in spending will be the largest research-and-development boost in the company's 116-year history. Most of the increased spending will be put toward a new state-of-the-art R&D center to replace its current R&D facility in Suffern.
Avon said it intends to start construction of the new facility in early 2003 and complete it by early 2005.
Andrea Jung, chairman and chief executive officer, said, "The expanded commitment to R&D will enable Avon to continue to increase its market share by creating exciting new products for women utilizing leading-edge technologies.
"A new world-class R&D facility will play a critical role in helping Avon meet escalating consumer demand for science-based beauty products," Jung said.
"One of Avon's strengths has been its ability to develop innovative, breakthrough beauty technologies for the mass market, including our highly successful line of anti-aging skin care products. This new facility will ensure that we build on our leadership position on a global scale well into the future," she said.
Avon also said the majority of the production at Suffern will be transferred to a larger and more modern manufacturing facility in Springdale, Ohio, which has available space and a more efficient configuration.
Avon said it concluded that its current Suffern manufacturing facility, due to age and structural limitations, is not suited for improved operating efficiency. Suffern has been a manufacturing site for Avon since 1897 and is currently used to make lipsticks and other color cosmetics products.
"This decision was extremely difficult and was not taken lightly, especially since our Suffern manufacturing associates are an extremely dedicated and hard-working group," said Lou Mignone, group vice president, supply chain, for Avon's U.S. business.
"However, in evaluating the options, moving the Suffern-based manufacturing production to the larger, more modern facility in Springdale is the right business decision for Avon," Mignone said.
"This action is part of our ongoing reengineering of the U.S. supply chain, which will help make Avon more efficient, reduce expenses, and free-up resources that can be reinvested for future growth," Mignone added.
Avon said approximately 260 positions will be eliminated at Suffern, and it expects to add approximately 200 new jobs at Springdale.
Earnings rise at Tommy Hilfiger
NEW YORK, May 23 (UPI) -- Fashion firm Tommy Hilfiger Corp. said its fourth-quarter net income for the period ended March 31 rose 21 percent to $40.7 million, or 45 cents a diluted share, from $33.6 million, or 37 cents a share during the same period last year.
Analysts on Wall Street had expected the apparel designer and retailer to post a net income of 40 cents a share, according to Thomson Financial/First Call.
Revenue rose 5.9 percent to $499.8 million from $472.0 million a year ago.
Joel Horowitz, chief executive officer, said, "The major factor driving our improved operating results for the quarter was the strong contribution to both revenue and operating income of Tommy Europe.
"Performance in our U.S. wholesale divisions also improved, as we continued to operate with much leaner inventory levels than a year ago, resulting in a higher percentage of regular price selling and a higher gross margin," he said.
Looking ahead, the company said it continues to expect revenue for fiscal 2003 to be essentially unchanged from fiscal 2002, with a low single digit decline in first half revenue offset by second half increases.
Horowitz said, "Having gained greater visibility into retailers' Fall and Holiday plans, we believe we can achieve the current consensus estimate of $1.64 per share for fiscal 2003 as reported by First Call."
