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ATI Q1 2000 profits, revenues up on rising Rage sales

DRAM price raises hit costs, though

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An increase in the demand for ATI's Rage 128 and Rage Mobility chips boosted the 3D graphics specialist's first quarter 2000 earnings by 15.3 per cent, despite product line rejigs and increased costs. Driving that profit gain was 26 per cent sales growth, reaching $413.5 million from the $327.4 million the company --the world's largest 3D chip business - posted for the same period last year. After exceptional items, ATI posted a profit of $53.6 million for the three months ending 30 November 1999 - so it doesn't include the vital pre-Christmas buying period, traditionally a time of strong sales for the games hardware industry. For the same period last year, profits totalled $50.1 million. However, gross margins fell year-on-year, from 36.6 per cent to 34.1 per cent, primarily due to increased material costs. Clearly the last nine months' hike in the price of video memory has played a key part here. ®

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