Although AST Research Inc. expects to report record sales for its fourth fiscal quarter, the Irvine-based personal computer and computer products maker said Wednesday that it will announce that profits will be lower than the $3.5 million posted in the preceding quarter.
The company attributed the plunge, the fifth consecutive quarter that earnings have fallen below those of the comparable quarter in the previous year, to slow sales of some of its older product lines and to start-up costs for the personal computer series introduced in December.
The company said the increased sales--expected to be 10% to 20% above the record $55.4 million reported in the third fiscal quarter ended March 31--were due to the popularity of its new personal computers.
The company said it would report results for the quarter and for the year ending June 30 in late July.
Last year, as sales of its established products for the IBM personal computer began to slow, AST decided to produce entire computer systems to compete directly with the IBM systems. That shift came after IBM began including as standard equipment the features that AST was selling through its lines of enhancement boards for the personal computer.
The drain on profits caused by the cost of developing and starting manufacturing of the new personal computer system was anticipated, according to AST President Safi Qureshey. Qureshey has projected that earnings will pick up in the next fiscal year.