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Creative misses the mark

The PC multimedia technology maker says its fourth quarter results for this year will fall short of analyst expectations.

PC multimedia technology maker Creative Technology said today that its fourth quarter results for this year will fall short of analyst expectations.

The company said revenues for the current quarter, ending June 30, are anticipated to be 10 percent lower than revenues for the same quarter last year, down from expectations that revenues would be flat year to year. Gross margins for the same quarter are now expected to be in the mid-20s, down from expectations that gross margins would be about 30 percent.

Wall Street analysts had expected a profit of 38 cents a share, according to First Call .

The company cited the recent collapse of prices in the low-end and midrange 2D/3D graphics market. Price pressure in the market for low-end and midlevel graphics cards had two effects on the company during the fourth quarter, the company said in a statement. First, it reduced margins and sales for the company's stand-alone, low, and midrange 2D/3D graphics offerings. It also significantly reduced sales and margins of the company's system integrator bundles, which contained 2D/3D graphics cards along with other components.

Other factors affecting this quarter's results were the company's decision not to ship any of its soon-to-be-introduced Sound Blaster Live product in the quarter, price reductions for older audio products, and further downturns in the Asian markets.

The Singapore-based company's chief executive officer Sim Wong Hoo in a statement said the setbacks are transitory given the strong demand in the high-end market for its 3D Blaster VooDoo2 graphics product line.