S3 lowers financial results
By Craig Matsumoto
Santa Clara, Calif. - S3 Inc. will have to lower its financial results from recent quarters, cutting revenue by between $40 million and $70 million and net income by 14 cents per share, to 29 cents.
Officials believe the discrepancy arose because some parts were counted toward revenue after being shipped to distributors but before being sold to end customers. S3's policy is not to count revenue until the part has been sold to an end customer.
S3 expects to reclaim the revenue during this quarter, as the improperly tallied parts find their way off distributors' shelves. Meanwhile, chief executive Gary Johnson said, "We are currently implementing measures to ensure that this type of error will not recur."
S3's stock fell $1-13/32, to $7-11/32, after the announcement.
The news continues a bad streak for the company. On Oct. 21, S3 had anticipated a weak fourth quarter, saying its products would continue to be hurt by falling prices until next year, when S3's next generation of graphics controllers is due to ship.
For the first nine months of the year, S3 reported net income of $22.1 million, or 43 cents a share, on revenue of $367 million.
Copyright (c) 1997 CMP Media Inc.
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