ATI saw its sales dip during the third-quarter despite a big year-on-year gain, the graphics chip company said yesterday. Sales for the three months to 31 May 2006 reached $652.3m and yielded a net income of $31.9m.

Those figures represent sequential declines of 2.9 per cent and 6.5 per cent, respectively. Sales were up 23 per cent year on year. In Q3 FY2005, ATI reported a net income of $400,000 - so far below Q3 FY2006's figure as to make a percentage comparison meaningless.

ATI's PC- and consumer-oriented products accounted for 77 per cent and 23 per cent, respectively, of the company's sales during the quarter. The firm said it shipped more units during the three-month period than ever before, and saw its gross margin rise to 30.1 per cent - the highest it's been for five quarters, but some way off Q3 FY2003's 39 per cent.

ATI forecast Q4 sales of $620-660m, with gross margin rising to between 31 per cent and 31.5 per cent. Operating expenses, excluding stock option expense, amortization of intangible assets and other charges, are expected to be between $155m and $160m, it added. ®