Applied Micro Circuits Corp. (AMCC) recently reported revenues of $45.1 million in its fiscal first quarter, up 10% sequentially but down 26% year over year.
Gross margin came in at 50.8% compared to 46.7% in the previous quarter and 53.5% in the year-ago quarter. Operating expenses declined 30.1% sequentially and 13.0% year over year.
On a GAAP basis, net loss from continuing operations came in at $2.8 million or 4 cents per share. On a non-GAAP basis, net income came in at $0.9 million or 1 cent per share.
Earlier in the quarter, Applied Micro Circuits completed the sale of its 3ware storage adapter solutions business to LSI Corp. (LSI) for approximately $20.8 million. The company had expected that the acquisition of 3ware storage adapter solution business (in 2004) would strengthen the company’s position in SATA based RAID controllers. However, management stated that the customer base, the product requirements and the business dynamics have not converged with its semiconductor solutions. Hence, it decided to sell this business. The company will now focus on its data center, enterprise and telecom businesses.
Going forward, management expects revenues to grow by 5% – 9% on a sequential basis. This implies revenue guidance between $47.3 million and $49.2 million. Gross margin is expected to be flat. The company had an improved backlog position when entering the September quarter. Management expects that there will be steady improvement in profitability as revenues ramp back to last year’s levels.
Over the past 12 to 18 months, Applied Micro Circuits has undergone a number of management and product transitions. In order to lower operating expenses, the company has reduced its workforce by 17%. The overall restructuring should position the company to enter a period of sustainable revenue growth as newer products move in for production at key original equipment manufacturers and supply chain challenges get ironed out with signs of economic recovery.
Headquartered in San Diego, California, Applied Micro Circuits is a leading provider of high-bandwidth integrated circuits (ICs) for optical telecom networks.
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