PC manufacturer AST Research has blamed poor industry demand, due to overproduction by its rivals, for its disasterous results which have led to 300 job cuts in the US.
The company lost $115.8 million for Q1 1996, causing it to close offices.
It will take a restructuring charge of $10 million to $15 million in Q2.
AST has made a loss for the last seven quarters.
Sales during the quarter fell from $670 million to $530 million. In Q1 1995, AST made a loss of $6.5 million. The job cuts, along with those previously announced, mean that AST will reduce its worldwide workforce by 1,000 staff. On the back of the poor results, AST is restructuring its worldwide operations into separate entities and is considering closing some of its regional offices.
Fraser Associates chairman Harry Thuillier said he did not expect AST to return to profitability for the next couple of quarters. He said that aggressive price cutting by AST (PC Dealer, 1 May 1996) would be expensive in terms of price protection.
US representative Emory Epperson said it had not decided where the changes would take place. No one from AST UK would comment on the results. IDC analyst Philip Williams said AST, which was the number three supplier in the UK in Q1 1996 with 7.3 per cent of units sold, was improving its position.
'They had a pretty bad Q1,' said Williams. 'But sales are picking up.' He said that AST's biggest problems were that the push into retail made corporate customers think the company was going down-market, and that it lagged behind Dell and Gateway when it came to getting new Pentium-based product to market.
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