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Technology Stocks : ATI Technologies in 1997 (T.ATY) -- Ignore unavailable to you. Want to Upgrade?

To: Marc who wrote (3068)	4/8/1999 11:26:00 PM
From: Marc	Read Replies (1) \| Respond to of 5927

[Dow Jones Online News,585 words] (UPDATE) ATI TECHNOLOGIES' 2ND-QUARTER EARNINGS FELL 20% ON CHARGES ...i think i will keep this news and post it once a week till next Q.* THORNHILL, Ontario -(Dow Jones)- ATI Technologies said Thursday that net income fell almost 20% in the second quarter, including charges related to its acquisition of Chromatic Research Inc. The Canadian supplier of multimedia technology and 3D graphics (ATYT) reported net income of $21.7 million, or 10 cents a diluted share, for the quarter ending Feb. 28. That includes a charge of $17.3 million, or eight cents a share after taxes, for the amortization of acquired intangibles related to the Chromatic Research acquisition. Excluding the charge, ATI reported earnings of $39 million, or 18 cents a diluted share. The mean estimate of analysts surveyed by First Call was for earnings of 16 cents a diluted share, but analysts were widely expecting net income to come in a couple cents above their official estimates. A year ago, the company earned $27.0 million, or 13 cents a share. Sales rose 63% to $297.2 million. The company said gross margins were within company objectives at 36.7% in the second quarter, compared with 37.9% a year earlier. ATI said operating costs, excluding acquisition amortization costs, rose 84% in the latest second quarter, largely because of the expected increase in research and development expenses relating to the acquisition of the Chromatic development team. ATI paid $67 million last year to buy the start-up company to get technology needed for its products. ATI president and chief executive K.Y. Ho said he is "comfortable" with analysts' estimates for fiscal 1999. "We still are expecting this (fiscal) year that we'll have 50%-60% revenue growth (over fiscal 1998) and also continue increasing our market shares (in both desktop and notebook graphics chips in fiscal 1999 over fiscal 1998)," Ho said. ATI said it isn't worried about the price cuts by S3 Inc. (SIII), designed to regain market share lost to ATI last year. There has been some nervousness in the market that ATI might have to lower prices on its chips to respond to S3. Ho told Dow Jones that graphics-chips companies don't just compete on price. They also compete on chip performance, best value for that performance and other factors, he said. As well, computer makers don't necessarily want to do business with a company that is "losing money." S3 isn't profitable. Computer makers want to do business with graphics-chip companies that have the finances to support future development and maintain a long-term business partnership, Ho said. Revenue from ATI's recent RAGE 128 chip did contribute significant revenue to the quarter, especially in the retail channel, ATI said. ATI is entering a new business in making chips for television set-top boxes. Revenue isn't expected to start until the fourth quarter of fiscal 1999, with significant revenue starting in fiscal 2000. But Ho said the set-top-box market is growing faster than expected. While revenue won't start any earlier, he is expecting it to ramp up faster than he would have expected a few months ago. Ho said he expects to have product from Chromatic, which is developing system-on-a-chip technology for low-end computer and Internet appliances, for sampling at the end of this fiscal year. Any revenue contribution will be in the next fiscal year, he said, adding that he isn't expecting to announce any contracts until after sampling. Also Thursday, ATI said it will develop graphics products for the digital flat-panel market based on the Digital Visual Interface, or DVI, standard developed by the Intel Corp.-led Digital Display Working Group. -Scott Adams; 416-943-7804; scott.adams@dowjones.ca Copyright (c) 1999 Dow Jones & Company, Inc. All Rights Reserved.