Applied Micro's Sales Plunge

Applied Micro Circuits(AMCC Quote) saw its revenue plunge 28% quarter over quarter as a glut of chips in the market dented its sales.

The Sunnyvale, Calif., chipmaker in its first quarter posted a net loss of $16.4 million, or 6 cents a share, in the three months ended June 30. At this time last year, Applied Micro had a net loss of $817,000, or nil cents a share.

Excluding stock option compensation charges, Applied Micro said it lost 3 cents. On that basis, analysts polled by Thomson Financial were looking for a loss of 2 cents.

Sales of $50.1 million were in line with Wall Street's dampened expectations, after the company's preannouncement earlier this month.

In paring back its guidance then, Applied Micro cited weakness in the telecommunications markets and weaker-than-expected processor sales due to product introduction delays.

Applied Micro had sales of roughly $70 million in both the immediately preceding quarter and year-ago period.

CEO Kambiz Hooshmand said Wednesday in a statement that the first quarter represents the bottom of the correction cycle, and he cited the company's book-to-bill ratio of 1.15. A book-to-bill ratio above 1 is generally considered a sign of strong future demand.

Hooshmand said the company will return to "solid" revenue growth in the current quarter and will continue the trajectory throughout the rest of the year.

Applied Micro did not give any specific financial guidance for the third quarter, although the company was scheduled to hold a conference call with investors later Wednesday.

Shares of Applied Micro were off 2 cents at $2.95 in extended trading.