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To: Johnny Canuck who wrote (42506)	6/23/2005 1:06:59 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 68396

ATI Tech Swings To 3Q Loss; Cuts 4Q Revenue View Thursday June 23, 7:11 AM EDT MARKHAM, Ont. -(Dow Jones)- ATI Technologies Inc. (ATYT) (ATYT) swung to a small loss from a profit in a "challenging" third quarter after recording stock-based compensation costs in its latest period. In a news release, ATI said it lost $400,00 or nil a share in its latest quarter, compared with a profit of $49 million or 19 cents a year earlier. Excluding costs and related taxes, the company said it would have earned $8.5 million or 3 cents a share in its latest quarter, compared with $50.5 million or 29 cents a year earlier. Revenue for the third quarter rose to $530.2 million from $491.5 million. The Thomson First Call mean estimate was for a third-quarter profit of 4 cents a share on revenue of $530 million. The company said its results are consistent with preliminary results announced in early June when it issued a third-quarter earnings warning and provided fourth-quarter guidance that was well below expectations. ATI had projected third-quarter revenue of $530 million. ATI said the third quarter was particularly challenging in its PC business, " where we came in well below our expectations for both revenue and gross margin." For the fourth quarter, ATI said it now expects revenue of about $550-$580 million, which is below its $600 million projection provided earlier in June. The revision reflects a more conservative expectation on the ramp of new products in the fourth quarter. Gross margin percentage in the fourth quarter is expected to be in the range of 29-30%, but is largely dependent on the final product mix for the quarter. Operating expenses, excluding stock-based compensation costs, are expected to remain flat to up 3% from the third quarter, it said. ATI makes 3D graphics and digital media silicon products. Company Web Site: ati.com =- ATI Technologies Inc. (ATYT) (ATYT) said its PC segment accounted for 87% of revenue in its third quarter, while the consumer segment accounted for about 13%. Gross margin percentage for the third quarter was 29.1%, down from 35.1% a year earlier. During the quarter, ATI said it experienced an overall mix shift in its company product lines as well as some operational issues in the packaging and test area of the manufacturing process, both causing gross margins to decline from a year earlier. The company said total operating expenses, excluding stock-based compensation, increased 31% in the quarter, mainly related to research and development expenses, which were up 35% from a year earlier. Dow Jones Newswires