Feeds

ATI makes loss (or is that profit)?

Seeing red, ramping up

  • alert
  • submit to reddit

ATI, Canada's biggest graphics chip maker, fell into the red in Q3, declaring a net loss of $2m for the three months to May 31. But look at it another way and come up with something called adjusted net income then the company pulls a $19,2m profit out of the bag.

Back-to-back sales were up ever so slightly, from $266m in Q2 to $266.2m in Q3, and 8.5 per cent up on Q3 last year (244.5), an increase attributed primarily to higher sales (we think we could have worked that one out) and market share in core PC markets. The company forecasts revenues for Q4 will be flat, or slightly down - it says its key system builder market remains weak.

Q3 gross margins were up too, a pleasing 1.2 points 35 per cent. ATI says this is driven by a 'richer chip mix' which is good news for the future. However the company anticipates a fall in the next Q of up to three points, citing "product transition in the fourth quarter as new products ramp and replace older products approaching end of life".

ATI continues to build a big cash pile, generating $21.1m in cash in Q3, ending the quarter with $265.m in the bank. Inventory rose by $10.6 million in Q3 to $127.7m, which obviously grew faster than revenues. It works out at 7/8 weeks of stock. Nothing to get too worried about. Yet.

According to the company, Q3 and Q4 are scene-setters for a barnstorming fiscal 2003. That's when it will reap the full benefits of "production ramping in set top box, handheld and integrated graphics chipsets, as well as the introduction of our new family of discrete graphics". Also it expects a strong performance in Q4 from its Nintendo contract. ®

ATI press release (PDF)

Whitepapers

Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.