SANTA CLARA, Calif. -- NeoMagic Corp. today reported third quarter net earnings of $4.1 million, or 16 cents per diluted share, on revenues of of $70.3 million, an increase of 4% compared to net sales of $67.4 million for the third quarter of fiscal 1999.
Net income in the year-ago quarter was $8.6 million, or 33 cents per diluted share.
Revenues increased 17% sequentially, from $60.3 million for the second quarter of fiscal 2000. NeoMagic, a maker of graphics chips, experienced capacity problems in its second quarter, but said those issues had been solved by the third quarter, which ended Oct. 31.
"We worked closely with our vendors on bringing more production on line near-term," said Prakash Agarwal, president and CEO. "The MagicMedia256AV provided the majority of our revenues during the third quarter, and we expect it to continue doing so for several quarters."
On Thursday, NeoMagic announced that it had begun shipping the MagicMedia256AV through its foundry arrangement with Infineon Technologies AG (see Nov. 18 story).
"We are on track with the plan, which we unveiled last spring, to bring Infineon into our supplier mix," Agarwal said. "We are now ramping our production at Infineon, and expect to begin volume deliveries late in the fourth quarter. This relationship is a major facet of our long-term capacity strategy."
The company has started making initial deliveries of the MagicMedia256XL+, a single-chip 3-D multimedia solution for notebook computers. But earlier delays in getting the chip into production have affected the company's ability to get it designed into notebooks for the next two quarters, the company said. As a result, NeoMagic expects to lose unit-volume market share through the second quarter of the coming year.