CYRX) today shrunk its losses, but missed expectations for the
June quarter as demand fell for older chips.
The supplier of processors to the PC industry today reported
a net loss of $5.3 million, or 27 cents per share for the quarter,
compared to a net loss of $16.4 million, or 85 cents per share
for the same period last year.
The company's stock gained nearly 7 percent in trading today to close at
23, up from yesterday's close of 21-9/16.
Analysts were expecting a smaller loss of 20 cents a share, according to First Call. The consensus estimate
was a downward revision made earlier this month after the company warned
profits would not keep up with the first quarter's result.
Revenue for the second quarter ending June 30 was $40 million, up from the
$27.1 million reported in the same period last year. But revenues were off
nearly 50 percent from the $75.6 million generated in the previous quarter.
Despite the loss, Cyrix said it remains on track to achieve
significant revenue growth and return to solid profitability in 1997.
Cyrix executives previously blamed the shortfall on an
industry-wide drop in demand for midrange processors. They now say the current
product lineup positions the company to take advantage of the growth
opportunities in both the sub-$1,000 PC market with its MediaGX and the
mid-range PC marketplace with its newly launched, 6x68MX multimedia
Steve Tobak, vice president of corporate marketing, said Cyrix expects
revenue to improve in the third quarter as demand for low-end chips and
multimedia chips remains strong. The biggest challenge is ramping up
production for those high-end chips with big gross margins.
The company shipped twice as many MediaGX chips in the second quarter as it
did in the first, but those low-end chips have lower gross margins than the
high-end chips that were in short supply, which contributed to the fall in