Applied Micro has 4th-quarter loss on expenses

Applied Micro Circuits Corp, a maker of chips for fiber-optic telecommunications equipment, had a fiscal fourth-quarter loss on acquisition expenses. Revenue dropped 15 percent from the previous quarter as chip demand fell amid an inventory glut.

The loss of US$193.7 million, or US$0.65 a share, compares with net income of US$20.6 million, or US$0.08, a year earlier.

Sales in the period ended March 31 more than doubled from a year earlier to US$121.1 million, less than the company's reduced forecast in March.

Nortel Networks Corp and Cisco Systems Inc, among the largest makers of telecommunications gear and Applied Micro's No. 1 and No. 3 customers, both cut their revenue forecasts several times this year. First-quarter sales will fall to between US$70 million and US$85 million and are likely to rebound after that, Chief Executive David Rickey said on a conference call with analysts.

"No one knows for sure" when sales will pick up again, Rickey said. "The only thing that's going to make me feel better is hard orders in my hand." Applied Micro shares have declined 68 percent this year.

Phone companies are spending less on capital investment, hurting equipment suppliers and chip producers such as Applied Micro and Broadcom Corp.

First-quarter profit, excluding acquisition-related and stock expenses, will range from break-even to US$0.02 a share, Rickey said. The company isn't planning to fire any employees. Instead, it will slow hiring and cut spending on travel and on temporary and contract workers, he said.

The company was expected to report profit of US$0.07 a share on revenue of US$106.4 million, the average from polls by First Call/Thomson Financial.

The book-to-bill ratio last quarter was 0.47, Chief Financial Officer Bill Bendush said, meaning the company received US$0.47 in orders for every US$1 in revenue.

During the quarter, Nortel accounted for 12 percent of revenue, Marconi Plc was 11 percent and Cisco was 10 percent.

Excluding acquisition-related and stock expenses, the San Diego-based company said profit would have been US$28.3 million, or US$0.09 a share. The company was expected to earn US$0.09 a share on that basis, the average estimate of analysts polled by First Call.

Applied Micro on March 1 lowered its revenue forecast for the quarter to between US$125 million and US$135 million.