04/08 16:40 ATI Technologies reports big revenue jump
(All figures in U.S. dollars except where indicated) By Jason Hopps
TORONTO, April 8 (Reuters) - Canada's ATI Technologies <ATY.TO>, the world's largest supplier of 3D graphic chips, reported a hefty gain in second-quarter revenue on Thursday and pledged continued expansion beyond its core PC business.
The Thornhill, Ontario-based company, which holds 34 percent of the graphic chip market, ahead of competitors S3 Inc.<SIII.O> and Intel Corp. <INTC.O>, said it expects 60 percent revenue growth for fiscal 1998-1999, ending in August.
ATI reported second-quarter profit of $21.7 million, or $0.10 a share, for the quarter ended February 28, 1999, compared with $27 million, or $0.13, in the year-before period. Revenue soared 63 percent to $297.2 million from $182 million.
ATI took a $17.3-million charge in the period for its acquisition in November of Chromatic Research Inc, a chip technology developer. Before the charge, ATI's profit was $39 million or $0.18 per share.
"We're extremely pleased with the results and we feel very comfortable saying we'll have 55 to 60 percent revenue growth this year compared to last fiscal year," ATI founder and Chief Executive K.Y. Ho told Reuters.
"Our main business is still in the PC sector, but we're planning ahead to diversify into the consumer appliance business," he added.
ATI's industry-leading technology includes its All-in-Wonder Pro card, applicable for business computing but also capable of transforming a PC into a television set. ATI has also developed a combination VCR and personal computer "set-top box", which allows the television to be used as a gateway to the Internet.
The company acquired Chromatic Research last November to help develop chips for its non-PC or so-called "consumer appliance" business, which includes telephone devices and hand-held games. ATI said it could be prowling for more takeover targets.
"The whole board and chip industry is undergoing consolidation and we always keep the option open for another acquisition," Ho said.
"Although the average selling price for products like hand-held games is lower than the personal computer, our contribution to the product is larger than our contribution into PCs. That's how we will maintain our momentum in the coming years," he added.
ATI shares were lower at C$23.70, down C$1.20 in moderate volume on the Toronto Stock Exchange on Thursday.
TD Securities retains a buy recommendation on ATI while Merrill Lynch & Co. Inc. has a short-term buy and a long term accumulate rating.
($1=$1.50 Canadian)
((Reuters Toronto newsroom (416) 941-8107, toronto.newsroom@reuters.com)) |
