AST Stock Hits Record High on Earnings Report

IRVINE —  Continuing to pleasantly surprise Wall Street, computer maker AST Research Inc. on Thursday reported that its second-quarter earnings rose 120% to $16.3 million, up from $7.4 million a year earlier.

Revenue for the quarter ended Dec. 28 was up 24% to $161.1 million, from $130.2 million a year earlier.

The earnings report sent AST’s stock soaring to an all-time high of $40 a share, up $2.625 in over-the-counter trading Thursday.

Steve DeLuca, an analyst with Cruttenden & Co. in Newport Beach, said he had forecast earnings of $13.9 million for the quarter--similar to the company’s own earlier estimate in December.

“There’s no sign they are slowing down, despite the economy,” DeLuca said.

Joel Don, an AST spokesman, said the company’s business is so strong that it expects to hire 150 people by the end of June, boosting its worldwide employment to more than 2,600. The new jobs will include production jobs in Orange County and sales and marketing positions overseas. Don said AST’s high-performance business computers based on the Intel 80386 microprocessor and the i486 microprocessor continue to drive the company’s growth. The company has been shifting its business away from the lower-priced consumer market.

Despite the U.S. recession, AST’s domestic sales grew 13% during the second quarter from a year ago. The company said that is about twice the overall industry growth rate.

The company began shipping computers for the Japanese market in October. International sales increased to 43% of total sales in the latest quarter.

Don said the company is trying to line up Japanese distributors to sell the machines, which are compatible with the dominant Japanese personal computer standard, but he said the firm does not expect the Japanese market sales to impact overall revenues in the near-term.