AST Research Rolls Along on Revenue Gains
Undeterred by war and recession, computer maker AST Research Inc. reported Wednesday that its earnings rose 74% to $16.7 million for its third quarter, ended March 29.
The quarterly earnings compare with $9.6 million a year earlier. Sales for the quarter were $180.1 million, up 31% from $137.2 million in the 1990 period.
AST attributed the growth to outstanding demand for two new product lines: notebook computers that fit inside a briefcase and desktop computers based on Intel Corp.’s i486 microprocessor. The company said notebook computers accounted for 8%, or about $14 million, of its third-quarter revenues.
“The strong third-quarter revenues signify that AST is successfully penetrating” the top ranks of the personal computer market, Safi U. Qureshey, co-chairman and chief executive, said in a statement.
“We recognize other manufacturers are reacting to our product-pricing strategies,” Thomas Yuen, co-chairman and chief executive, said in a reference to a computer price war started in Houston this week by rival Compaq Computer Corp. “We intend to continue to be price and performance trend-setters in the industry.”
The record earnings for the quarter is a continuation of two years of solid results based on the company’s strategy, which combines tight financial controls, quick introduction of new products to the market, low prices and expansion into international markets, the company said.
Steve DeLuca, an analyst for Cruttenden & Co., an investment banking firm in Newport Beach, said the earnings were in line with expectations.
He noted that pricing pressure cut gross profit margins--a ratio of manufacturing costs to sales volume that is used to measure manufacturing efficiency and price competition--slightly to 35.9% in the third quarter, compared to 37.7% in the previous quarter. Third-quarter margins were up compared to 33.3% a year earlier.
Next week, AST is expected to announce a new machine based on Intel’s new 486SX microprocessor with 20 megahertz of computing speed, according to industry sources.
AST stock rose $1 to $29.50 in over-the-counter trading Wednesday. The earnings report was issued after trading ended.
