Transmeta Q3 sales slump

May halve again during Q4...

Transmeta yesterday admitted its sales had fallen by almost half between the second and third quarters of its current fiscal year and almost 60 per cent down on Q3 2002.

Sales for the three months to 26 September totalled $2.7 million, down 47.1 per cent on the previous quarter's $5.1 million and 57.8 per cent on the $6.4 billion it recorded for Q3 2002.

The plunge saw the company's loss widen to $23.7 million (17 cents a share) from Q2's $22 million (16 cents a share) and the year-ago quarter's $21.8 million (16 cents a share).

The current, fourth quarter isn't going to get any better. Despite launching its new Efficeon processor on Tuesday, Transmeta reckons its sales could halve again at worst - at best, they'll stay the same - with a loss of around 15-17 cents a share. That's excluding $3 million worth of non-cash amortization and deferred compensation charges.

Q4 operating costs are likely to stay at around $18.5 million. Cash at the end of December should be approximately $52 million, after a regularly scheduled payment of $7 million to IBM in accordance with the two firms' technology licensing agreement. So the company can keep going for at least a few quarters yet. In the meantime, it needs to wish like crazy that Efficeon starts attracting a broader range of customers.

In what's almost an admission that it doesn't expect to sell too many chips, the company reiterated its plan to offer the intellectual property bound up in its processors to other chip makers. President and CEO Matthew Perry said Transmeta has seen "significant interest from several parties" for its LongRun power management technology. ®

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