Dow Jones Newswires
NEW YORK -- Aavid Thermal Technologies Inc.'s
(AATT) stock is down 50% on news of decreased
demand from Intel Corp. (INTC), although Aavid
expects its third quarter earnings to match its year-ago
figure of 25 cents a share.
Intel was Aavid's largest customer during the second
quarter, accounting for net sales of about $15 million or
about 28% of Aavid's total net sales of $54.3 million.
Sales to Intel will be "down but not gone" in terms of
value and revenue during the third quarter, a company
spokesman told Dow Jones.
Aavid's announcement late Tuesday of second-quarter
net income of 34 cents a diluted share, up from 23 cents
a year ago, included a warning that it expected an
"interruption to our long-term growth trend" during the
third and fourth quarters. The company's earnings met
analysts' expectations.
On Wednesday, investors focused on the bad news, as
Aavid fell 15 5/8, or 52.1%, and recently traded at 14
1/4, with 2.4 million shares having traded hands on the
Nasdaq. Average daily volume is 146,800 shares.
"We were surprised at literally the 11th hour" by news
that Intel's purchases were going to be "radically
changed" in both demand and technology mix during the
current quarter, an Aavid spokesman told Dow Jones.
Second-quarter sales of Aavid's Aavid Thermal
Products unit were $28.3 million to computer and
network users and $16.5 million to others, the company
said. The thermal products unit makes heat management
hardware.
As inexpensive personal computers increase their market
share, Aavid will have to sell its hardware directly to
personal computer makers, the company said. Sales to
that sector increased 30% during the second quarter, the
spokesman said. "We are in good position," he said.
Second-quarter sales were $9.1 million in Aavid's Fluent
Inc. software unit and $300,000 in the Applied Thermal
Technologies design unit.
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