AST Research Revenue Up 60%; Some Laid-Off Workers Rehired
Computer maker AST Research Inc. matched Wall Street’s expectations by announcing a 20% increase in earnings and a 60% increase in revenue for its latest fiscal quarter.
The demand for desktop computers was so great that AST had to recall some of the 450 workers it had laid off earlier at its plant in Fountain Valley, said Safi U. Qureshey, chairman and chief executive of AST. The workers will continue to produce personal computers in Fountain Valley for the next few months as AST expands other manufacturing operations in Texas, Ireland and Asia.
The company, based in Irvine, reported a profit of $13.2 million, or 40 cents a share, for its third quarter, which ended March 31. That compared to earnings of $11 million, or 35 cents a share, for the same period a year earlier. Three-month revenue was $591.3 million, up from $370.3 million. That performance was in line with what the company had projected in March.
“Analysts changed their estimates after the company said its revenues would not grow 70% for the quarter,” said Eugene Glazer, analyst at Dean Witter Reynolds investment bank in New York.
During the quarter, AST shipped 332,000 PCs. Sales of notebook computers, which weigh less than eight pounds and fit in a briefcase, rose 129% to 88,000 units.
Glazer said he expects AST’s new line of computers with human interface programs, which feature the image of a person speaking from the computer screen, should do well in the coming quarter. Dubbed AST Works, it uses technology that AST picked up when it acquired the computer assets of Tandy Corp. last year.
But he said the company is late with a new line of portable computers known as subnotebooks--machines that weigh several pounds. Competitors such as Toshiba America Information Systems in Irvine and Compaq Computer Corp. in Houston already have such models on the market. Qureshey said AST is waiting until that market becomes better defined and expects to launch a subnotebook line by the fall.
For the first three quarters of its fiscal year, AST earned $39.4 million, or $1.18 a share. That compared to a profit of $33.3 million, or $1.04 a share, for the same period a year earlier. Nine-month sales were $1.78 billion, up from $1 billion.
