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Tornos Drops on Tooling Machine Maker’s Job Cuts: Zurich Mover

Sept. 7 (Bloomberg) -- Tornos Holding AG fell the most in more than two weeks after the Swiss maker of machines that produce precision components said it’s cutting 225 jobs to save as much as 35 million francs ($37 million).

The stock declined as much as 6.1 percent and was 5.1 percent lower at 6.50 francs as of 2:49 p.m. in Zurich. Shares of the Moutier-based company, whose products help produce Swiss watches, aircraft screws and medical devices had gained as much as 2.9 percent earlier in the day.

Tornos said it’s adapting to a shift in production to China from Europe and to the debt crisis weighing on demand in southern Europe, as well as the strong Swiss franc, which reduces the value of sales from other countries. The company said last month it wouldn’t break even at the level of earnings before interest and taxes in 2012, after first-half orders dropped 34 percent from a year earlier.

The measures are “absolutely necessary in our view as the company has failed to generate sustainable profits on the existing business model,” Fabian Haecki, an analyst at Bank Vontobel, wrote in a note to investors. “We would not buy the stock ahead of its huge operational and strategic projects.”

To contact the reporter on this story: Thomas Mulier in Geneva at tmulier@bloomberg.net

To contact the editor responsible for this story: David Risser at drisser@bloomberg.net

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