AMCC Announces Preliminary Q4

SUNNYVALE, Calif. -- Applied Micro Circuits Corporation (Nasdaq:AMCC) today announced that based on preliminary financial information the Company expects to report net revenues of approximately $70 million for the quarter ended March 31, 2007, down approximately 8.5% compared to the quarter ended December 31, 2006. The Company had previously provided guidance for fourth quarter revenues to be down between 2% and 5% sequentially.

Revenues declined in all business lines and sales to distributors were down nearly 30% relative to the December quarter. This was partially offset by higher than expected revenue from a processor design production ramp and also by $3 million of revenue from an unanticipated non-recurring transaction. These fourth quarter results are preliminary and thus are subject to the Company's management and independent registered public accounting firm completing their quarterly and annual review procedures.

As a result of these revenue mix shifts, pricing and other factors, the Company expects that gross margins as a percentage of revenue will be lower by two to three percentage points compared to its previously provided fourth quarter gross margin guidance.

The Company also announced that it is anticipating a sequential 15% decline in revenues for the upcoming June quarter. This anticipated decline in revenues is due primarily to expected weakness in distribution, lower beginning backlog, lower projected non-recurring revenues and a decline in revenues from the previously mentioned processor design production ramp.

Applied Micro Circuits Corp. (AMCC)