ATI lowers revenue forecast
ATI has issued a fourth quarter financial update warning that revenues will be lower than expected:
MARKHAM, Ontario, Aug 29, 2005 (BUSINESS WIRE) -- ATI Technologies Inc. (NASDAQ:ATYT)(TSX:ATY) today provided an update on expectations for its fourth quarter of fiscal 2005. ATI now expects revenues for the fourth quarter to be in the range of $465 - $480 million(1), compared to the expected range of $550 - $580 million provided on June 23, 2005. Gross margin percentage for the quarter is expected to be in the single digit range, which includes an inventory writedown that is expected to be approximately $60 - $70 million. Operating expenses, excluding the costs associated with stock-based compensation, are expected to be in the range of $143 - $148 million, which is in line with guidance.
A poor performance by ATI's desktop line is blamed for the downgraded revenue forecast, although ATI remains optimistic that its upcoming desktop products will allow it to regain technology leadership. In related news, a class action lawsuit was recently filed
against ATI alleging violations of federal securities laws.
Specifically, the Complaint alleges that, during the Class Period, ATI issued a series of materially false and misleading statements regarding ATI's business and prospects and concealed serious operations issues that would have a material effect on its financial results.
To ATI's credit, in the fourth quarter revenue update, CEO Dave Orton claims that the company is "committed to resolving [its] operational issues."