Can this stop the pain <g>
Wednesday February 21 5:40 PM ET
Applied Micro on Track Despite Telecom Slowdown
DANA POINT, Calif. (Reuters) - Communications chip maker Applied Micro Circuits Corp. (NasdaqNM:AMCC - news) said on Wednesday that increased demand for bandwidth and its focus on the introduction of newer high-speed products will keep company growth on track despite a slowdown in telecommunications capital spending.
Speaking at a growth stock conference being held here, AMCC Chief Financial Officer William Bendush cited estimates that by 2003 the company's products will command a potential market of $10.5 billion.
``The markets are becoming standardized and we are getting a significant portion of that,'' Bendush said. He said AMCC and its competitors ``are feasting on the outsourcing needs of our customers,'' which include major networking companies like Cisco Systems and Nortel Networks.
Bendush said AMCC's growth is not driven by capital spending, rather it is being driven by growth of its core optical market, a focus on higher-speed products and its growing market share.
Although expecting continued strong growth in its core optical market, the San Diego-based company expects growth in that particular segment to slow this year to 61 percent from 90 percent in the previous year. However, Applied Micro does anticipate its overall market share will increase to 24 percent in 2001 from 18 percent in 2000.
Earlier this month, AMCC reaffirmed earnings estimates for its fiscal fourth quarter ending March 31, and as well the first quarter ending in June, citing continued strong new bookings amid a slight upturn in order delays and cancellations.
Last week, the company's largest customer, Nortel Networks, warned of lower-than-expected revenues, raising new concerns about AMCC's outlook.
``Undoubtedly we are in the midst of an inventory correction. In the long-term the fundamentals are very, very strong,'' Bendush said. He noted in his presentation that Nortel's share of AMCC revenues has fallen to 18 percent from 25 percent.
``We hope this is just a one to two quarter adjustment and believe in the fundamentals of this market. We'll just have to power our way through this thing,'' he said.
AMCC's shares have dropped 42 percent since the start of the year and closed off 5 percent on Wednesday to end Nasdaq trade at $36-1/16. |
