Powerwave Stock Falls on S. Korea Orders Fears

Investors jittery over the Asian economic turmoil sent Powerwave Technologies Inc.’s stock plunging 25% on Thursday, after the company said it expects some orders in its largest market, South Korea, to be postponed.

Underscoring the dangers of relying heavily on a single geographical area in the global economy, Powerwave Chief Executive Bruce Edwards said customers could delay or cancel their orders if market conditions within South Korea remain troubled.

The South Korean market accounted for 83% of the Irvine company’s total revenues in 1997, and three of Powerwave’s largest customers are based there. The company makes power amplifiers used in wireless telephone networks.

“Anyone involved in business in Korea right now has got to be feeling the effect,” said Edwards.

The stock sank to a record low Thursday, dropping $3.56 a share to close at $10.44 on Nasdaq. More than 5.4 million shares changed hands, 25 times the average daily volume over the last three months.

Like many other technology issues, Powerwave became a Wall Street favorite after its initial public offering in 1966, when its stock sold at $12 a share.

Last October, the stock climbed to $48.50 a share, as Powerwave benefited from its reputation as a fast-growing company that had found a solid niche market.

Late Wednesday, in fact, the company announced that earnings and sales more than doubled in the fourth quarter ended Dec. 28.

“Powerwave had a good quarter, but it wasn’t as good as many people expected,” said Tony Robertson, an analyst with BancAmerica Robertson Stephens. “With the potential growth in South Korea slowing, people are getting cautious.”