The company's loss for the fourth quarter, which ended Aug. 31, totaled $32.2 million, or 14 cents a share, compared with a loss of $11.6 million in the same quarter a year ago. For the 2002 fiscal year, the loss totaled $47.5 million, down from 2001's $54.2 million loss.
Fourth-quarter revenue came in at $239.5 million, up from $229.1 million a year ago. For the year, revenue was $1.02 billion, compared with $1.04 billion in 2001.
Excluding amortization of intangible assets and other charges, the company calculated a profit of $2.4 million, or a penny per share, for the fourth quarter, and $49.7 million, or 20 cents a share, for the year. On that basis, analysts polled by First Call expected a profit of 2 cents a share for the quarter and 21 cents a share for the year.
ATI said in a statement that it expected to boost profits by focusing purely on graphics chips, leaving other manufacturers to assemble the finished circuit boards that go into PCs.
"The transition of our business from a board to a chip model, while it had a constraining effect on our revenues for this fiscal year, has had a direct impact on improving margins and our profitability compared to last year," said Terry Nickerson, ATI's chief financial officer.
ATI, once the leader in a crowded graphics chip market, has trailed in market share the past several years as rival Nvidia put out faster products and helped drive competitors out of business.
ATI hopes to shift the balance, however, with its hit by the sluggish overall PC market.Radeon 9000 and 9700 graphics chips, which boast significantly faster performance than competing Nvidia chips. While ATI has touted recent market share gains with the new chips, sales have still been
ATI executives blamed the disappointing numbers largely on a decline in revenue from graphics chips for notebook PCs, an ATI stronghold in recent years. A weak overall market and the need for ATI to price new products to compete with older products from competitors have kept profits down in the sector, ATI President David Orton said in a conference call with financial analysts.
"It's going to take a couple of quarters for us to get the mobile (profit) margins back where we need," Orton said. "The newer products are more margin-challenged."