Applied Micro Misses Q1 Revenue Estimates, Shares Tank 9.9%

Applied Micro Circuits Corporation (AMCC) reported first-quarter fiscal 2015 non-GAAP net income (excluding non-recurring items) of $0.2 million or breakeven results on a per share basis versus $1.4 million or 2 cents per share in the year-ago period. The disappointing results tanked the shares 9.93% to close on $8.71 yesterday.

On a GAAP basis, Applied Micro reported a net loss of $13.1 million or loss of 17 cents per share compared to a net income of $10.9 million or 15 cents per share in the year-ago quarter. The year-over-year decrease in net income was driven by higher operating expenses.

Quarter Details

Net revenues for the first quarter of fiscal 2015 were $50.3 million versus $54.1 million in the year-ago quarter. Net sales for the reported quarter missed the Zacks Consensus Estimate of $52.0 million.

Revenues from the computing business grossed $18.9 million in the quarter, while the connectivity business generated $31.4 million. Geographically, sales to Asia accounted for approximately 52% of total revenue, followed by North America (38%) and Europe (10%).

Operating expenses for the reported quarter increased to $43.5 million from $24.6 million in the year-ago quarter. Selling, general and administrative expenses were $9.1 million versus $9.5 in the year-ago quarter. R&D expenses were $33.2 million in first-quarter fiscal 2015 versus $34.5 million in the prior-year period.

At quarter end, Applied Micro had cash, cash equivalents and short-term investments of $98.6 million compared with $106.6 million at Mar 31 2013. Net cash used in operating activities was $6.5 million versus $17.8 million in the prior-year period.

Outlook

Applied Micro expects to continue its healthy revenue momentum with new product introductions in the coming quarters. The company expects embedded computer products to generate healthy revenue growth in the forthcoming quarters driven by X-Gene based embedded products.

For second-quarter fiscal 2015, total revenue is expected in the range of $42 million to $46 million. Non-GAAP operating expenses are expected within $28.0 million and $30.0 million.

Applied Metro currently has a Zacks Rank #3 (Hold). Other stocks that look promising in the industry include Avago Technologies Limited (AVGO), NVE Corp. (NVEC) and Semiconductor Manufacturing International Corp. (SMI), each carrying a Zacks Rank #1 (Strong Buy )

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