Linkabit Likely to Remain Among M/A-Com Divisions
M/A-Com’s operations in San Diego probably will remain part of the Burlington, Mass.-based telecommunications firm, despite indications that the company will dispose of as much as a third of its businesses, industry analysts said Tuesday.
“I can’t see the (San Diego-based) M/A-Com Linkabit operations as being vulnerable” to being sold or closed down, said Joseph Bellace, a New York-based analyst with Merrill Lynch. “Although the division has to start turning a profit, M/A-Com’s most innovative digital technology comes from Linkabit.”
Although M/A-Com Video Products Group Vice President Larry Dunham acknowledged that M/A-Com’s board of directors has considered “scenarios involving restructuring,” the San Diego-based executive declined to describe what form any realignment would take.
“M/A-Com management is not commenting at all on the restructuring,” Bellace said Tuesday. “But (Linkabit’s) video business, although it’s believed to have been losing money, won’t be part of that restructuring.”
An industrywide slump forced M/A-Com to lay off 80 employees in November, but the company still has more than 1,200 employees in San Diego.
Bellace, who linked the November layoffs to a slowdown in government contracts, suggested that M/A-Com’s San Diego operations probably would soon start turning a profit.
“That’s a fair statement,” said Dunham, who oversees the M/A-Com division that developed the firm’s deciphering device. The instrument allows home satellite dish owners to unscramble the growing television programming distributed via satellite.
“You have to recognize that M/A-Com carried our losses and funded our research for the last three years when (the outlook) wasn’t so glowing, but it looks as if their patience is finally being paid off. Our video operations are a bright spot in the near term,” Dunham added.
M/A-Com’s San Diego operations grew out of Linkabit, a company founded in Los Angeles in 1968 by two university professors. The company, which later moved to San Diego, was purchased by M/A-Com in 1980.
In addition to the video-deciphering division, M/A-Com’s San Diego operations are involved in government contracts and satellite telecommunications, two areas which analysts have branded as playing growing roles in M/A-Com’s future.
