(Updated from 4:57 p.m. ET)
Communications chip maker
Applied Micro Circuits
added its name to the list of companies suffering from the collapse of the telecommunications markets Monday, saying that revenue in the June quarter would be almost half what analysts had been expecting.
Applied Micro also said that it may take special charges for five areas including excess and obsolete inventories, goodwill on acquired companies, impaired equity investments, impaired fixed assets and an organizational restructuring.
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The company now expects first-quarter revenue of $40 million to $45 million, down 63% to 67% from the previous quarter, and it expects to lose 4 cents to 6 cents a share, not including charges for restructuring. In April, the company had told analysts to expect a decline of up to 42%. According to
Thomson Financial/First Call
, analysts expected revenue of $73.3 million, down from $121 million during the March quarter. Analysts also anticipated the company would break even after earning 9 cents a share during the previous quarter.
In a statement, Applied Micro Chief Executive Dave Rickey said that business remains very poor, orders are weak and backlog has declined. "The magnitude of this downturn is greater than we, or our customers anticipated, and the progress in reducing excess inventory in the channel appears to be slower than they originally thought," he said.
During a conference call, Rickey cautioned against reading a slowdown in cancellations as anything more than a reflection of declining backlog. "Although I believe a stabilization and a recovery in our revenue will occur yet this year, it is difficult to see tangible signs that allow me to call a bottom," he said.
Shares of Applied Micro lost about 7% in after-hours trading to $13.03.
Applied Micro Circuits makes chips that are used by telecommunications equipment companies like
. Those companies have been suffering because telecom infrastructure companies have slowed spending, creating an inventory build-up all along the supply chain.