ATI looking up
Improved margins help ailing graphics card manufacturer
The press release proudly announces that "ATI reports improved Q3 results", but dig a little deeper and it becomes obvious that the Canadian graphics manufacturer is still in trouble. The document proudly reveals that sales are up by 10%, but this is compared to the previous quarter's post-Christmas sales lull. In fact the company is still down by over $30m compared to the same period last year, with revenues of $256m - 10% higher than the last quarter but 11% lower than this time last year. Most of this improvement came from sales of chips for laptop computers and other mobile devices though, as rivals NVIDIA continue to steal market share and valuable supply contracts from the former OEM-meisters ATI.
It's not all bad news though. Margins were up slightly at 27%, helping to reduce the company's adjusted net loss for the three months from $23m last year to $4m this year. In fact, ATI expects to break even by the end of the year and get back into positive territory next year, although this may prove to be rather optimistic as their forecasts depend on an up-turn in the computer industry as well as managing to win back customers from NVIDIA. Whether their follow-up to the Radeon will arrive in time and at the right price to accomplish that remains to be seen. One thing they can rely on though is some healthy royalty payments from Nintendo, whose new GameCube console will be powered by an ATI chip and is almost certain to be a huge hit in Japan at least.
