AST Forecasts Flat Growth, Senior Execs Depart
NEW YORK (AP) _ AST Research Inc.’s president and two other top executives quit as the company forecast a quarterly loss and stagnant sales, a sharp contrast to rivals in the booming personal computer industry.
The news Monday came less than a month after Samsung Electronics Co., a leading South Korean consumer electronics company, invested $377.5 million for a 40 percent stake in the company, which is based in Irvine, Calif.
But Samsung did not force the executive changes, said AST chief executive officer and co-founder Safi Qureshey.
Sales for the July-September quarter, the first of its fiscal year, have been disappointing in the United States with orders delayed by customers waiting for Microsoft Corp.’s new Windows 95 software, which became available Aug. 24, he said. Sales were soft for seasonal reasons in Europe.
``That combination really took a toll on us,″ Qureshey said.
Jim Schraith, AST’s president and chief operating officer, and two top executives resigned effective immediately. Qureshey and Bruce Edwards, executive vice president and chief financial officer, will share the duties of president while the company looks for a new one.
``This last year has really been a challenging one for us,″ Qureshey said. ``And we reached an understanding, especially Jim who has worked with us for so long, and decided this is best for him to step aside.″
Qureshey said the company would seek a new president who has experience in strategic relationships such as the one AST forged with Samsung.
Also departing were Jim Wittry, senior vice president responsible for the Americas, and Scott Smith, vice president in charge of desktop computer products. Gerald T. Devlin, who left AST 20 months ago to become a vice president of sales at Xerox Corp., rejoined in Wittry’s post.
AST said revenue will fall at or below the $495 million reached in the same period a year ago, which had also been weak. Its net loss will be ``significantly higher″ than the $40 million of that period.
AST also said it may take other restructuring charges, which would extend its loss.
The news reflected the intense pressure on the nation’s seventh-largest PC maker from competitors that are gobbling up market share, particularly industry leader Compaq Computer Corp. and fast-growing Hewlett-Packard Co.
Analysts fear the company may not return to profitability for some time.
``Fiscal 96 is clearly a loss year already, period,″ said James Poyner, analyst at Oppenheimer & Co. ``This market share loss is becoming a pretty serious situation.″