ATI Technologies posts third-quarter loss

ATI Technologies, the graphics chip supplier for next-gen consoles the Xbox 360 and Nintendo Revolution, has posted a loss for the third quarter running from March to May this year.

Gross revenues increased from $491.5 million to $530.2 million, while stock-based compensation and costs incurred by research and development resulted in a 8 per cent earnings spike and a loss of $445,000 for the quarter year-on-year.

The company also changed its forecast for fourth-quarter sales, reducing the revenue estimate from $580 million to $550 million.

ATI CEO David Orten commented: "Q3 was a challenging and disappointing quarter that fell well below our expectations, both in top-line revenues and in gross margins."

However, he also observed that the company had "delivered on some critical milestones" during quarter three.

"Our OEM traction remained strong in both our desktop and notebook discrete product lines," said Orten.

"HyperMemory is now shipping in Tier 1 OEMs such as Dell, HP, and Fujitsu Siemens. And mobility rating on X700 launched the new flagship designs from Gateway and Acer."

Orten went on to state that ATI's new multi-GPU platform architecture, CrossFire, has "received broad industry support from leading motherboard manufacturers and our add-in board partners."

Speaking to Reuters, analyst Brian Alger described the guidance revision as "shocking".

Brian Piccioni of BMO Nesbitt Burns also told the news service that the company's consumer business was "of particular concern," adding: "Pricing pressure in the segment remains severe... We expect the stock to trade down on the weakened guidance, and consumer weakness in particular."