Weak TV ad sales cut Gennum’s profits

Article Excerpt

GENNUM CORP. $4.07 (Toronto symbol GND; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 35.4 million; Market cap: $144.1 million; Price-to-sales ratio: 1.3; SI Rating: Average) makes chips and other electronic equipment that let television broadcasters store, edit and transfer video signals without losing picture quality. Many TV broadcasters are putting off buying new equipment due to lower advertising revenue. As a result, Gennum’s sales fell 36.1% in its third quarter, which ended August 31, 2009, to $21.4 million from $33.5 million. (Gennum reports its results in U.S. dollars, but its share price and market cap are in Canadian dollars). In response to the falling sales, Gennum recently announced plans to cut 10% of its workforce by the end of this year. Because of a related $5.5-million charge for severance and other costs, Gennum lost $4.3 million, or $0.12 a share, in the latest quarter. The company did not reveal how much these moves would save it, but it did say…