Photonics instrumentation and laser vendor Newport has begun making cost-cuts to its operations as order levels are hit by a slowdown in government spending on research.

Reporting a mixed picture of market trends impacting it in the second quarter of fiscal 2012, Newport CEO Robert Phillippy said that the current lull was affecting research spending in the key areas of aerospace and defense, together with life and health sciences.

The company posted sales of $153.7 million in the quarter, up year-on-year thanks to the multitude of acquisitions made by Newport over the past twelve months, but down 2.2% from the opening quarter of the year and slightly below expectations.

Uncertainty in the key US market is particularly acute in the aerospace and defense sector, where major cuts to the Department of Defense budgets are possible at the end of the current calendar year – depending on political developments.

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