Applied Micro Slashes Guidance - Analyst Blog

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Applied Micro, Inc. ( AMCC ) recently slashed its guidance for the fourth quarter of fiscal 2012.

Applied Micro now expects that the revenue in the fourth fiscal quarter of 2012 will come in 6% lower than the mid-point guidance of $52 million, provided earlier.

The new guidance was down $3.1 million, driven by softness in both the Transport and Processor product families. The revenue shortfall was primarily attributed to softness in the service provider space and overall weakness in wire line market.  Nevertheless, OTN revenue and sequential ramp came through as the company expected and did not account for any of the shortfall in revenues.

Applied Micro continues to expect earnings per share between ($0.10) and ($0.12) per share.

Earnings estimates have declined considerably in the last sixty days after disappointing results for the third quarter of fiscal 2012. 

Although earnings of ($0.10) were in-line with the Zacks Consensus Estimate, sales continue to be weak. Net sales came in at $56.3 million, down 9.6% year over year and 13.2% sequentially, failing to meet the Zacks Consensus Estimate of $59 million.

Headquartered in Sunnyvale, California, Applied Micro Circuits Corporation is a leading provider of high-bandwidth low power integrated circuits (ICs), which are essential for the processing, transporting and storing of information.

We expect a further decline in estimates with the cut in guidance by the management. Judging by the weakened macro conditions and weak outlook of AMCC, we think it wise to retain our sideline view on the company's stock, thereby maintaining our Neutral rating.

Our Neutral rating is supported by Zacks #3 Rank, which translates into a short-term rating of Hold.


 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

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