3rd-Quarter Profits Up 10% for AST Research

AST Research Inc., the Irvine maker of accessories for desktop computers, posted third-quarter profits of $6.4 million, 10% above the $5.8 million recorded in the year-ago period. Revenues of $41.5 million were up 10% from $37.8 million.

Although the quarter’s performance set another record for the fast-growing company, the increase was far below those AST has become accustomed to since its founding in 1981.

President Safi Qureshey blamed the results on a slowing of sales in the weeks preceding two of IBM’s new product announcements during the quarter. In both cases, AST officials explained, retailers wanted to minimize their inventories of AST’s IBM-compatible products in case they were made obsolete by the giant computer maker’s new moves.

During the third quarter, IBM unveiled a new engineering computer system, a new portable model and new versions of two of its popular desktop models. Significantly more than half of AST’s revenues come from products made to increase the memory, speed or functions performed by IBM computers.

Although analysts and retailers feared that the IBM announcements could hurt AST’s business, the new products have proved, so far, to pose less of a threat than originally thought.

For the first nine months of the year, AST had profits of $32.1 million, up 88% from the $12.3 million recorded for the same period last year. Revenues of $132.3 million were up 37% from $96.2 million.