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Applied Micro Circuits exceeds 2Q expectations

    Applied Micro Circuits (Nasdaq: AMCC) beat second quarter estimates and predicted a "strong" third quarter.

    In fiscal second quarter results released after market close Monday, the maker of chips for optical networks reported earnings of $9.1 million, or 16 cents per share. First Call's survey of 13 analysts predicted a profit of 13 cents per share, for the quarter ended Sept. 30.

    Second quarter revenue rose to $37.9 million, up 49 percent year-over-year and up 20 percent sequentially. Communications revenue increased 38 percent. Gross margins were 70.1 percent in the second quarter.

    "This combination of rapid revenue growth couple with solid execution on the part of the company translates to a strong outlook for the third fiscal quarter," said Dave Rickey, president and CEO.

    The stock market pummeled Applied Micro last week after another network chip maker, Hi/fn, warned of slack demand in the December quarter. Shares of Applied Micro rose 7/8 to 69 13/16 in Monday's regular trading, prior to the second quarter report.

    Also Monday, Applied Micro announced the appointment of Atiq S. Raza to its board of directors. Raza resigned as president and chief operating officer of Advanced Micro Devices in July.

    Among 11 Wall Street firms polled by Zack's Investment Research, seven recommend Applied Micro with the equivalent of a "strong buy" rating and four have "moderate buy" advisories on the stock.>