Graphics chip and board maker
ATI Technologies Inc.
on Monday updated guidance for its fourth quarter of fiscal 2005. The company lowered revenue expectations US$85 to $100 million, to $465 – $480 million. The company expects single-digit gross margin percentage for the quarter, and operating expenses in line with previously announced guidance.
ATI said the lowered guidance was the result of its desktop product line, which missed targets both in units and average selling prices for its retail and add-in board (or system integrator) channels. ATI didn’t have any other surprises in store in its other product lines.
ATI makes graphics chips and cards used across Apple’s product line and remains the only major vendor who offers a retail graphics card for Power Mac users. The company most recently introduced the
Radeon 9600 Pro PC & Mac Edition, a $199 AGP-based graphics card billed as the company’s first that works out of the box ready to support both Macs and PCs.
ATI President and CEO David Orton calls the quarter “challenging and disappointing,” but said that ATI remains optimistic about its future.
The company plans to flesh out additional detail with analysts this afternoon, but won’t have the final Q4 numbers ready until October 6, 2005.
The news comes only a couple of weeks after several law firms announced class action law suits pending against ATI in the United States District Court for the Eastern District of Pennsylvania. The suits have been filed on behalf of shareholders who held stock between October 7, 2004 and June 23, 2005. According to the claims, ATI and its officers provided false statements which inflated the market price of the company’s stock.
The news also comes about a week after securities firm UBS downgraded ATI’s stock from Buy to Neutral. ATYT closed at 11.34, down 1.05 percent or 0.12 for the day and down another 0.44 percent to 11.29 in after-hours trading.