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Applied Innovation sees 4Q income boost

Applied Innovation (Nasdaq: AINN) sees net income of more than $3.1 million in the fourth quarter.

After market close Tuesday, the vendor of communications network equipment and services said it expects to report fourth quarter net income more than 25 percent from $2.5 million in the comparable period a year earlier. The company projects fourth quarter revenue of more than $50 million, up more than 247 percent year-over-year.

First Call had no consensus analyst estimate available for Applied Innovation.

Many suppliers to the communications industry in recent months have warned of disappointing quarterly results because of spending reductions from communications companies, especially competitive local exchange carriers. But Applied said cutbacks among telecom companies will not "significantly" affect business.

"To date, our major CLEC customers remain financially strong," said Robert Smialek, president and CEO. "Furthermore, our traditional customer base of ILECs and other large service providers continue to demonstrate solid demand for our products, and product orders received in December 2000 remained strong."

Systems integration revenue powered much of the sales increase, Applied said.

"The unusually high volume of systems integration services that were achieved during the second half of 2000 are unlikely to continue, and absent similar unusually large deployment projects, systems integration revenue will most likely decline in 2001," Bialek said. "Nonetheless, we anticipate that growth in our higher margin products, software and services businesses will mitigate any potential earnings impact caused by a slowdown in the lower margin integration services.">