Marconi Plc continues to suffer as carriers keep pruning their spending plans. It has warned that sales in its core business showed a 6% sequential decline to £482 million ($747.1 million) in the quarter to September 30, and was 40% down on the same period last year.
In the face of the market meltdown, all that the troubled London, UK-based telecoms equipment maker can do is to cut jobs and a headcount of 19,000 at the end of September will be reduced further to 15,000 early in the next financial year.
When Marconi handed 99.5% of the company to its creditors in August as the only way out of its debt problems, it put forward two projects for its future, one of which was a sensitized plan to show it could survive even slower growth than expected.
The fact that, after two months, it is now trading in line with that plan shows how rapidly the market has deteriorated, and any further downturn could leave it facing major difficulties.
Chief executive Mike Parton said that in some markets it is seeing stabilization and in other markets further deterioration. While core sales in the EMEA region were flat at £285 million ($441.7 million), there was a 7% sequential decline to £142 million ($220.1 million) in the US.
Order intake during the quarter in the core business was just £379 million ($587.4 million), and while the book-to-bill ratio in network equipment was 0.9, it fell to 0.6 in network services, giving an overall ratio of 0.8.