Applied Micro issues 1Q warning

Applied Microsystems Corp. (Nasdaq: APMC) said Tuesday it expects first quarter earnings will be about a dime below analysts expectations.

The company said it was going through a transition, and that its new management team would leverage its expertise in traditional embedded systems to enter new high-growth markets.

Shares in the company, which makes development tools for engineers who design, debug, and test embedded systems that control such devices as ATMs, cellular phones, and flight control systems, closed at 15 3/4 Monday. The stock has recovered over past months after hitting a low of 2 1/16 after it warned of a second-quarter loss in July.

The company expects to report revenue of between $8 million and $8.2 million for the quarter ended March 31, slightly less than the $8.5 million reported in the comparable quarter of 1999.

Net loss for its first quarter 2000 is expected to be between 20 and 25 cents a share, much lower than the loss of 14 cents predicted by First Call compared to a net loss of 14 cents a share in the first quarter of 1999.

Since 1997, Applied's first quarter revenues have been sequentially lower than the preceding fourth quarter figures, the company said.

Applied's preliminary estimates indicate a sequential sales decrease of about 8 percent to 11 percent. Sales declined 12 percent to 15 percent from the fourth quarter to the first quarter in the last three years.

"Even though we are disappointed in the first quarter results, we remain confident that these new markets -- including Internet infrastructure and game development systems -- as well as a continued focus on telecommunications, will begin paying off before the end of 2000," said CEO Stephen J. Verleye in a company statement.

The company competes with Agilent Technologies (NYSE: A), Mentor Graphics (Nasdaq: MENT) and Wind River (Nasdaq: WIND), according to the company's Hoover's profile.