SAN JOSE, Calif. Amid delays with its new graphics chip, ATI Technologies Inc. reported a loss and slumping sales.
ATI said that sales were $530 million in the third quarter, up 8 percent over the like period a year ago. For the third quarter, net loss was $0.4 million, or breakeven, as compared with net income of $49 million, or $0.19 per share, in the third quarter last year.
"It was a challenging quarter for ATI, particularly within our PC business where we came in well below our expectations for both revenue and gross margin," said David Orton, ATI's chief executive, in a statement.
Earlier this month, ATI said it expected revenue for the third fiscal 2005 quarter to be $530 million, 5 percent below the low end of the company's original guidance. ATI (Markham, Ontario) attributed the lower expected sales to the product mix being slanted toward the lower end of the desktop and notebook market, in turn lowering gross margins.
The company is also reportedly late with its new graphics chip, dubbed the R520. The chip was supposed to be out sometime this week, but now it is expected to ship in a month or two, according to the San Jose Mercury News.
ATI was supposed to roll out the R520 at the time of its rival's new chip introduction. Nvidia Corp. on Wednesday (June 22) unveiled a redesigned graphics card and chip that's meant to support film-quality visual effects in videogames. The GeForce 7800 GTX is the new flagship for Nvidia (see June 22 story).
For the fourth quarter, ATI is seeing a slightly better outlook. It anticipates revenues in the range of $550-580 million.