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Technology Stocks : Applied Micro Circuits Corp (AMCC) -- Ignore unavailable to you. Want to Upgrade?

To: Raymond Duray who wrote (164)	10/14/1999 11:29:00 AM
From: Beltropolis Boy	Read Replies (1) \| Respond to of 1805

fwiw, here's a little local flavor on earnings, courtesy of the San Diego Union-Trib. ----- 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."