Record revenues for ATI on back of PCI Express and notebook chip sales

By Alun Williams

Posted on 7 Oct 2004 at 14:02

PCI Express business and increased notebook chip sales have lead to graphics chip giant ATI reporting record revenues for a consecutive quarter, according to the company's latest financial results. With revenues of $572.2mn for the fourth quarter of fiscal year 2004 (ending 31 August), this represents a 50.3 per cent increase over its previous fourth quarter. The company also reported net income per share as $0.24 compared to $0.09 for the same period a year ago.

'Our corporate strategy continues to produce returns,' states ATI's CEO, David Orton. 'Our PCI Express desktop product line-up is the most competitive product family on the market, resulting in tremendous customer acceptance. In addition, the growth rate of our digital consumer business continues to outpace the market, based on ATI's innovative products for use in cell phones and digital televisions.'

ATI reported that it saw revenue increases across all of its main business lines. While desktop (discrete) chip revenues grew 40 per cent - attributed to PCI Express business with OEMs and expanded sales in the add-in-board channel - total notebook chip revenues (integrated and discrete) increased 20 per cent, resulting from overall market growth (despite a market share decline in the notebook integrated market). Increased demand from mobile phone manufacturers also lead to a doubling of handset chip revenues. Without specifying percentages, ATI declared that digital television revenues 'grew dramatically based on market growth and continued penetration of our products among top digital TV manufacturers'.

Spending on R&D increased 25.8 per cent year-on-year to, $77.1mn. The result, according to ATI, of an increased headcount and a wide range of programmes in growing business areas, as well as increased prototyping costs. Higher costs associated with licensing fees also added to the increase in R&D, it reported.

As for the immediate future, the company is bullish: expecting both digital consumer products and PCI Express-based PCs to drive growth for ATI. Post Christmas, however, the company expects 'a slightly weaker revenue and profit profile' for second and third quarters in fiscal 2005.

You can find more information on the results online at www.ati.com/companyinfo/ir/quarterlyresults.html.