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Technology Stocks : S3 (A LONGER TERM PERSPECTIVE) -- Ignore unavailable to you. Want to Upgrade?

To: Don Earl who wrote (11223)	6/15/1998 3:08:00 AM
From: som	Respond to of 14577

Very interesting for the short term. SINGAPORE, June 11 /PRNewswire/ -- Creative Technology Ltd. (Nasdaq: CREAF), today announced that its revenues and gross margins for its fourth quarter ending June 30, 1998, will fall short of analyst expectations. Revenues for the current quarter are now anticipated to be about 10% lower than revenues for the same quarter last year, down from expectations that revenues would be flat year to year. Gross margins for the current quarter are now expected to be in the mid 20s, down from expectations that gross margins would be about 30%. The primary factor underlying these changes is the recent collapse of prices in the low-end and mid-range 2D/3D graphics market. Price pressure in the market for low-end and mid-level graphics cards had two effects on the Company during the fourth quarter. It reduced margins and sales for the Company's stand-alone, low and mid-range 2D/3D graphics offerings. It also significantly reduced sales and margins of the Company's system integrator bundles, which contained 2D/3D graphics cards along with other components. Other factors affecting fourth quarter results were a decision not to ship any of Creative's soon-to-be-introduced Sound Blaster Live! product in the quarter, price reductions for older audio products, and further downturns in Asian markets. "The low-end and mid-range of the PC graphics industry has seen significant oversupply and tremendous price pressure in recent weeks, and Creative has not been immune from these conditions," said Sim Wong Hoo, chairman and chief executive officer of Creative Technology. "However, Creative has done very well with its high-end 3D Blaster Voodoo2 graphics products. The strong demand in this high-end market segment promises great things for the key products Creative will be selling in Fiscal 1999 -- not only high end graphics, but also high quality multi-channel speaker systems and, most importantly, our forthcoming Sound Blaster Live! product, which will begin volume shipments to our distribution channels in July. For all of these reasons, and given the exciting products ahead, we regard the set-backs of the current quarter (apart from Asia) as transitory. We therefore are not changing the guidance we have previously given for the upcoming fiscal year ending June 30, 1999." Creative Technology Ltd. develops, manufactures and markets a wide array of advanced multimedia solutions for the PC, entertainment, education, music and productivity tools markets. Creative's products are marketed through the OEM, systems integrator and retail channels under a variety of trademarks, including the "Blaster" family name. Sound Blaster(R) has become the multimedia industry's de facto audio standard. Sound Blaster is an audio platform consisting of a sound card or chipset, software drivers and bundled software applications that enable PCs to produce high quality audio. Creative's corporate headquarters and primary manufacturing facilities are based in Singapore, with sales, distribution and research and development being carried out through an extensive, global network of subsidiaries located in North America, Europe, Asia and Africa.