Despite Higher Revenues, AST Earnings Plunge 98%

AST Research, an Irvine-based computer manufacturer, said Friday that its earnings plunged 98% in its fiscal 1988 first quarter, although its revenues nearly doubled from year-earlier levels.

The company reported net income of $72,000 for the three months ended Sept. 30, down from $3.1 million during the same period in fiscal 1987. Sales increased to $78.6 million, from $40.2 million a year earlier.

AST’s earnings were “much lower than expected,” said Blake Richards, an analyst with Bateman Eichler Hill Richards, a Los Angeles investment firm. Bateman Eichler had estimated AST’s quarterly earnings at 15 cents per share, but the company achieved just 1 cent per share.

Shares Down $1.50

AST’s shares closed Friday at a 52-week low of $8.50, down $1.50 in over-the-counter trading. AST’s stock was trading at more than $15 per share at the beginning of the week.

AST President Safi Qureshey attributed the earnings decline to low profit margins on its Premium/286 product, an IBM-compatible personal computer introduced 10 months ago.

Price reductions, “inventory adjustments” and higher expenses for research, development and marketing also depressed earnings, Qureshey said.

The company said it expects to achieve higher profit margins, with two computers announced earlier this week, the Premium/386 and Premium Workstation. The machines are designed to offer some of the advanced features of IBM’s new line of Personal System/2 computers.