restructuring charge

Restructuring Charge

A cost that a company incurs when it reorganizes its operations. Restructuring charges include costs with opening or closing a factory, hiring new employees or paying the severances for lay-offs, and so forth. Restructuring charges are included in the calculation of a company's net income, but because they are unusual, a high restructuring charge is less likely to result in a steep decline in the company's share price.

restructuring charge

The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. It is not considered an extraordinary item and must be considered when calculating a firm's income from continuing operations.
Case Study In August 2001 Procter & Gamble Co. reported the first quarterly loss in nearly a decade. The $320 million quarterly loss resulted from a $1.16 billion restructuring charge to account for corporate streamlining and altering the firm's portfolio of brands. Procter & Gamble was in the process of divesting most of its food and drink business, mostly by entering into a joint venture with Coca-Cola, a plan that was later abandoned. The company reported it planned to continue taking restructuring charges through mid-2004. At the same time P&G reported the net loss, it announced that operating income increased 12% to 60¢ per share. Restructuring charges are often given little weight by investors and analysts who evaluate a company's financial performance, because these charges are considered one-time expenses. The market price of Procter & Gamble's common stock experienced no significant price change on the day the loss was announced.
References in periodicals archive ?
To obtain insights into the role accounting information plays in this compensation decision, we investigate the degree to which compensation committees assess the context of a specific income item--restructuring charges--when deciding whether to shield CEO compensation from the adverse effects of the restructuring charge on current period income.
Arecent study indicates that analysts may not be misled by restructuring charges and tend to revise their earnings estimate downward after a company announces a restructuring charge.
Analysts who get wind of a company announcing a restructuring charge tend to revise their one- and two-year forecasts downward -- but maybe not by enough, says a new study out of Vanderbilt University.
In 1985, CSX incurred a $954 million restructuring charge for book purposes.
During the fifty-two week period ended December 31, 2005, B&G Foods recorded in cost of goods sold a restructuring charge of $3.
Equinix excludes accretion expense, both as it relates to its asset retirement obligations as well as its accrued restructuring charge liabilities, as these expenses represent costs, which Equinix believes are not meaningful in evaluating the Company's current operations.
As a result, Lenovo's reported results reflect a restructuring charge relating to the plan of approximately US$19 million taken in the first fiscal quarter which ended June 30, 2006.
Approximately $15 million of this restructuring charge will be taken in 2006, with $8.
As a result, Lenovo's reported results reflect a restructuring charge relating to the plan of approximately US$70 million, or HK$543 million, taken in the fourth fiscal quarter which ended March 31, 2006.
As a result of these steps, Valeant expects to record a restructuring charge of approximately $80 million to $100 million, of which a portion will be recorded in the 2006 first quarter.
MOLX expects 3Q06 net revenue to be in the range of $690-710m and EPS including a pretax restructuring charge of $0.
NYSE:FDC) today announced that it will take a restructuring charge in the fourth quarter of approximately $0.