S3 delivers profits boast

Analysts get it wrong

This is a turn-up for the books. S3 has delivered a reverse profits warning. In other words, it's going to lose less money in Q2 than had been forecast by analysts. It may even break even on $50 million-plus revenues. Analysts thought the graphics chip vendor would lose 20 cents per share for the quarter: S3 says it will beat this by 15-20 cents when it announces its results after the close of play on 15 July. The company reckons it will now make a return to profitability before its original target of the end of the year. S3 has had a good three months, notching up several big OEM contracts with, inter alia, Compaq, IBM and Packard Bell. It also won a lucrative patent deal from foundry giant UMC and $500 million-worth stock, following the reorganisation of the Taiwanese company's capital structure. This gives S3 the wherewithal to acquire companies such as Diamond Multimedia. Post completion, S3 reckons it could pull in $1 billion next year. ® See also Creative Labs to dump S3 S3-3Dfx deal had legs S3 buys Diamond Multimedia S3 gets $42 million from UMC

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