Zenith Electronics Corp seems unfazed by its disappointing third quarter results and is looking forward to a more prosperous and traditionally strong fourth quarter, when television sales are at their peak. The Glenview, Illinois-based company saw third quarter net losses rise to $69.2m from $40.2m the previous year, while revenue plunged 10% to $304.5m. Zenith is attributing the poor results to a series of factors including the charges relating to the phasing out of its printed circuit board operation, picture tube availability and problems with shipping. Half of the third quarter loss was associated with charges for bad debts, inventory revaluation and merchandising programs. But the company says these are just temporary glitches and pins its hopes on the launch next year of high-definition television. The trouble is, high definition television is uncharted ground, as is the digital set-top box market which is also a key part of Zenith’s future strategy. In the third quarter, Zenith won an agreement from News Corp to provide digital set-top boxes for satellite-delivered video programming in Latin America and elsewhere around the world and starts to supply those systems in 1998. The third quarter saw sales of its analog set-top boxes and video cassette recorders fall, while cable modem sales grew slightly in the period, although the numbers are still very small. Its existing credit agreement has been amended, which Zenith hopes will take pressure off certain areas of the business while it continues to hunt for financing to support plans that – it hopes – will set it back on the road to recovery and profitability.
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