fwiw, here's a little local flavor on earnings, courtesy of the San Diego Union-Trib.
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Robust sales almost double AMCC earnings
Dean Calbreath
STAFF WRITER
12-Oct-1999 Tuesday
San Diego's Applied Micro Circuits Corp. outpaced Wall
Street estimates yesterday, with strong earnings growth
fueled by the company's growing sales to Canada's Nortel
phone company.
AMCC generated $9.1 million in net income in the quarter
ended Sept. 30, almost doubling the $4.7 million generated
during the same period of the previous year. Net revenues
jumped 49 percent to $37.9 million.
"It was a terrific quarter," said Arun Veerappan, an
analyst with BancBoston Robertson Stephens in San
Francisco.
Charles Gavin of Credit Suisse First Boston added that the
company seems positioned for similarly strong growth in
future quarters.
Since the beginning of the year, stock at AMCC -- which
produces high-performance microchips for high-speed data
and telecom networks -- has skyrocketed from just under $18
to an all-time high of $75.50 last Thursday. The stock
dropped to $68.9375 in profit-taking on Friday but rose
to $69.8125 yesterday on word of the Sept. 30 financials,
which marked the second quarter of the company's fiscal
year.
AMCC's earnings growth was driven by sales to such telecom
giants as Nortel, Alcatel, Marconi and Lucent. Sales to
Nortel grew 39 percent during the quarter. The company now
represents 36 percent of AMCC's business.
"Nortel's demand has remained extremely strong as it
appears that they are gaining market share ... ," said Dave
Rickey, AMCC's president and chief executive officer.
"Nortel has told us that they expect this demand to remain
strong for the foreseeable future."
Nortel, which last year ordered AMCC products mainly from
its headquarters in Montreal, has since begun placing
orders from Calgary and Europe as well. Rickey projected
that the growth in Nortel orders will slow down over time,
adding that he was not comfortable having such a high
concentration of business with one company.
"But when you have a Nortel, Lucent or Cisco with that size
(of orders), you're always happy being with them," he said.
Demand for AMCC products in the past year grew among non-
Nortel customers about as fast as it grew at Nortel. "But
outside of Nortel, nobody is so large that they could swing
the quarter," he said.
Thomas Tullie, vice president of sales, added that the
company has been able to attract new business from start-
ups and midsized companies because of its purchase in March
of Cimaron, a chip-design firm in Massachusetts.
"I'm seeing a really fantastic response from the customer
base, from the ability to give them one-stop shopping,"
Tullie said. "In just the few months since we've gotten the
partnership together, I'm seeing some of the big companies
who perhaps were afraid to buying from Cimaron coming
forward because they like AMCC." |
