Advanced Logic Research 1st-Quarter Profits Fall

Personal computer maker Advanced Logic Research Inc. said Monday that its first-quarter earnings dipped 85% from a year earlier, blaming falling prices and a slow economy.

Irvine-based ALR reported earnings of $462,000, or 4 cents a share, down from $3.1 million, or 31 cents a share, a year earlier. Revenue for the quarter ended Dec. 31 dropped 1%, to $49.4 million from $49.8 million.

Gene Lu, chief executive, said the company’s strategy of aggressive price cuts is taking a toll on profits. He said the company will continue to introduce new low-priced computers and reduce operating expenses. No layoffs are planned, he said.

“We satisfied the market with our prices, but our (profit) margins are under pressure,” he said. “We’re not looking for an economic rebound. We’re focusing on selling our products in our existing sales channels.”

Ian Gilson, an analyst with L.H. Friend, Weinress & Co., an Irvine investment bank, said the earnings results were disappointing but not unexpected.

Lu said sales of portable notebook computers, which fit inside a briefcase, were slow during the quarter. He said the company hopes that a new line of notebook computers to be launched in April will prove more popular.

James T. Richardson, chief financial officer, said the company’s cash reserves increased from $23.4 million to $33 million in the quarter. The company also obtained a $20-million line of credit from Sanwa Bank and the Hongkong and Shanghai Banking Corp. Ltd.