AST Predicts Gain of 10% for Quarter

Most companies would probably be happy with a record-breaking 10% quarterly growth in sales and income.

But for fast-growing AST Research Inc. that’s coming up short.

The Irvine maker of computer add-ons said Friday that it expects its net income and net sales for its third quarter, ending March 31, to hit record levels with increases limited, however, to about 10% over the comparable period last year. In last year’s third quarter, income was $5.8 million and revenues were $37.8 million.

The company decided to reveal its prediction because “we’ve always been up front with our shareholders,” said Bob Maples, AST’s public relations manager.

“We had a bad January and thought we ought to let our people know that we’re only going to grow 10%,” he said. “We don’t want our shareholders to get their expectations up.”

Maples said the company has been growing 20% to 25% a quarter since it opened in 1981. It expects to reach $180 million in sales in its current fiscal year, he said.

The quarter’s financial results come at a time of comparative weakness in the company’s retail sales channel,

“In the January time frame, the impact of Christmas inventory overstocking and concern over pending IBM announcements caused lower sales than expected through the retail channel,” said Safi Qureshey, AST’s president. “Our February retail sales were 30% higher than January’s, and recent bookings indicate they have returned to expected levels.”

Qureshey said the immediate future for the 6-year-old firm promises continued growth in international sales and sales to manufacturers of original equipment. A recent acquisition and new product shipments starting the fourth quarter will help AST return to its higher growth objectives, he said.