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Applied Micro warns on 1Q
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June 25, 2001: 4:41 p.m. ET
Chipmaker sees lighter sales, profit as weak demand lingers
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NEW YORK (CNNfn) - Applied Micro Circuits Corp. on Monday warned that its fiscal first-quarter financial results will fall short of previous expectations, which the communications chip specialist blamed on continued weak demand.
After the close of trading, the San Diego-based company said it expected its revenue during the quarter ending June 30 to range between $40 million and $45 million.
Analysts had generally expected the company's top line to come in at $73.3 million, according to a survey conducted by earnings tracker First Call.
As a result of the weaker-than-expected sales, Applied Micro Circuits (AMCC: Research, Estimates) said it expects to log a fiscal first-quarter operating loss, excluding restructuring and other extraordinary charges, ranging between 4 cents and 6 cents per share.
Wall Street had expected the company to break even during the fiscal first quarter. During last year's fiscal first-quarter, Applied Micro Circuits logged an operating profit of 11 cents per share.
"Current business conditions continue to be very poor," Dave Rickey, the company's chairman and CEO, said in a statement.
"New order activity has remained weak throughout the quarter and our overall backlog has declined," Rickey added. "The magnitude of this downturn is greater than we, or our customers anticipated, and the progress in reducing excess inventory in the channel appears to be slower than they originally thought."
Applied Micro Circuits specializes in making high-performance integrated circuits used to control the swift flow of voice and data transmissions across fiber-optic networks. It lists telecom and networking equipment suppliers such as Nortel Networks (NT: Research, Estimates), Cisco Systems (CSCO: Research, Estimates) and Lucent Technologies (LU: Research, Estimates) at the top of its roster of customers.
Many of its key customers, including Nortel, which represents roughly 38 percent of sales, recently have come out with earnings warnings of their own, which in turn has weighed on the companies that supply them with components.
Shares of Applied Micro Circuits rose 34 cents to $14.20 on Nasdaq ahead of the news. They dropped to $13.29 in extended-hours trade following the announcement. 
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