DIMD SHOULD ZOOM TOMORROW, SINCE SIII DID SO WELL IN EARNINGS. STREET WAS EXPECTING A LOSS OF 22C , WHISPER LOSS 18 C. SIII REPORTED A PROFIT OF 2C! WOW!
Thursday July 15, 8:47 pm Eastern Time
S3 reports slight profit in second quarter
SANTA CLARA, Calif., July 15 (Reuters) - S3 Inc. (Nasdaq:SIII - news), a maker of computer graphics chips, reported a slight profit in its second quarter, helped by widespread adoption of its Savage family of graphics chips by personal computer makers.
For the second quarter, S3 reported net income of $1.1 million, or 2 cents a share, compared with a net loss of $11.6 million, or 23 cents a share diluted, a year ago.
Revenues rose slightly to $57.3 million from $53.3 million a year ago.
''We continue to be pleased with both our financial and operational performance and are especially pleased with S3's return to profitability,'' Ken Potashner, president and chief executive of S3, said in a statement.
In the desktop market, S3 is seeing widespread adoption of its Savage4 chips and is manufacturing them in volume quantities. Potashner said he was encouraged by customer response to its new Savage products for the notebook market.
Earlier this month, S3 said its second-quarter results would beat analysts' expectations by 15 cents to 20 cents a share, because of many PC makers have agreed to use its graphics chips. At that time, analysts had estimated a loss of 20 cents a share, according to First Call Corp.
Last month, S3 agreed to acquire Diamond Multimedia Systems Inc. (Nasdaq:DIMD - news) in a stock swap valued then at about $180 million. With its purchase of Diamond, which makes graphics cards for PCs and the Rio Internet music player, S3 will expand into the Internet appliance and home networking markets.
Cash and cash investments in the quarter increased to $131.4 million from $129 million. That is net of a $10 million loan made to Diamond Multimedia during the quarter, S3 said.
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