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Not long ago, market analysts shook their heads when Irvine-based AST Research Inc. plunged into the fiercely competitive personal computer market with its own line of IBM-compatible machines.
The industry was already swarming with about 20 manufacturers of IBM compatibles, and few observers believed that AST could elbow its way into the crowd aggressively enough to make its "Premium/286" machine a success.
While some analysts remain skeptical, AST feels vindicated.
The company will report today that it achieved record sales of $206 million during the fiscal year ended June 30, up 20% from $172.3 million a year earlier. The revenue increase is attributed to soaring sales of AST's new computers late in the year.
AST's profits are another story. Squeezed by high start-up costs and lower profit margins for the new computer line, AST's net income fell 52% to $13 million in fiscal 1987 from $27.2 million in fiscal 1986.
For the fourth quarter, AST reported sales of $63.2 million, up 37% from $40 million a year ago. Final-quarter profits were $2.9 million, down 30% from $4.1 million in 1986.
Dismissing the earnings decline as a temporary problem, AST President Safi Qureshey said the revenue increase provides proof that AST's foray into the personal computer field was the right move at the right time.
Only seven months after the first Premium/286 computer rolled off AST's assembly line in Irvine, the machines currently account for more than half of the company's total sales.
Sales of AST's traditional lines of add-on circuit boards and other computer components were essentially flat in 1987. While the company has no plans to abandon the components business, personal computers are seen as...