* Revenue down 37 pct
* Reports loss of $0.03/shr vs net of $0.06/shr yr ago
* Reiterates full-year revenue view
* Shares down as much as 10 pct (Recasts; adds analyst’s comments, conference call details)
By Amit Kumar
BANGALORE, July 30 (Reuters) - Hemisphere GPS HEM.TO, a Canadian maker of GPS products, swung to a second-quarter loss, hurt by lower demand in its key agriculture sector, sending its shares down as much as 10 percent.
The company, however, reiterated its full-year revenue outlook of $60 million, on a conference call, saying it expects the second half of the year to be better than the first half.
“Customer purchasing activity in the agriculture sector continued to be at the low end of management’s expectations due to cautious recessionary spending within the agricultural equipment market,” the company said in a statement.
Hemisphere GPS, which makes GPS products for agriculture, marine and other markets, reported a loss of $1.3 million, or 2 cents a share, down from a profit of $3.2 million, or 6 cents a share, a year earlier.
Hemisphere, which cut its workforce by 21 employees to 241 during the quarter, said revenue fell 37 percent to $14.5 million.
Revenue from the agriculture segment fell 41 percent while the precision products segment saw a decrease of 11 percent.
Non-traditional farming tools like global-positioning systems and auto-steering, which allow farmers to precisely manage their land, have fallen victim to North American farmers’ thriftiness.
“The only thing that the company can do is to simulate farmer demand by providing trade finance,” Husein Kirefu, an analyst with M Partners Inc, said.
Kirefu added that the company might cut down on research and development, and sales and marketing, if the second half of the year continues like the first half.
Gross margin fell 50 percent, from 52 percent, primarily due to the impact of fixed manufacturing costs on lower revenue levels as well as from lower software revenue.
Total operating expenses were down 12 percent to $7.6 million, helped largely by the closure of its Texas office and the reduction in workforce, the company said.
The slowdown in decline in sales in North America, sequentially, and the recent increase in commodity prices, especially that of corn, would be important factors in the second half, the company said on the call.
Shares of Hemisphere GPS, which touched a low of C$1.04 Thursday on the Toronto Stock Exchange, recouped some losses and were down 5 Canadian cents at C$1.10 in the afternoon.
The shares have fallen almost 70 percent in the last one year. (Editing by Anil D’Silva and Unnikrishnan Nair)