Feeds

ATI Q3 loss wider than expected

Six-seven cents a share forecast turns into 10 cents reality. Oh dear...

  • alert
  • submit to reddit

Internet Security Threat Report 2014

ATI's previous predictions of revenue shortfalls and losses for its third quarter proved accurate today when the 3D graphics market leader posted "unacceptable" financial results for the three months to 31 May.

In the event, revenues were not down significantly. The quarter's sales of $288.2 million represents a fall of just 4.6 per cent from the $302 million ATI recorded for the same period last year.

ATI's loss, however, hit $23.1 million, well down on last year's $35.9 million profit. That amounts to a loss of ten cents a share - rather higher than the 6-7 cents a share the company had predicted.

And if you factor in the cost of ATI's acquisition of graphics chip developer ArtX ($20.3 million) and other charges and costs, the company's loss widens to $128.8 million, or 58 cents a share. For the same period last year, the company recorded income of $18.6 million after charges.

ATI blames its shortfalls on the continuing component shortage, which is hitting its OEM customers - ATI's core business - hard, plus competitors' "aggressive" price-cutting actions. ATI also found itself forking out huge sums to promote its older product lines, and to make a "special provision for excess and slow-moving inventory". Together they knocked $88 million off ATI's bottom line.

ATI CEO KY Ho dubbed the results "unacceptable" and pledged to return the company to profitability with a mixture of cost-cutting measures and sales of the upcoming 256-bit Radeon chip, which will enter volume production next month, the company said.

Radeon is key. Ho said the company was "pleased with the initial performance and acceptance of our Radeon chip by OEMs", while ATI's president and COO, Dave Orton, said: "We remain strong in OEM and retail sales, number one in mobile graphics and anticipate significant new business with our new high-end Radeon graphics processor, integrated graphics and set-top products."

Anticipating is one thing - getting it is another. Many of ATI's OEM customers are turning to other suppliers, most notably Nvidia, and that's going to mean ATI will have to work hard to win them back. In its favour is the fact that 3D graphics acceleration is now pretty much de rigueur in the mainstream PC markets, which should provide ATI with a much wider market to sell into. ®

Related Stories

ATI stock tumbles on earnings fears
ATI throws wobbler over prototype review
ATI says expect Q3 loss

Providing a secure and efficient Helpdesk

More from The Register

next story
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
'Cowardly, venomous trolls' threatened with TWO-YEAR sentences for menacing posts
UK government: 'Taking a stand against a baying cyber-mob'
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Arab States make play for greater government control of the internet
Nerds told to get lost in last-minute power grab bid at UN meeting
Zippy one-liners, broken promises: Doctor Who on the Orient Express
Series finally hits stride, but Clara's U-turn is baffling
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
Apple SILENCES Bose, YANKS headphones from stores
The, er, Beats go on after noise-cancelling spat
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.