Tech Industry

3Dfx posts huge loss in second quarter

3Dfx Interactive gave its investors some more bad news Tuesday when it posted a net loss of $100.5 million, or $3.81 a share, on sales of $67 million in its second quarter.

There was no First Call Corp. consensus estimate for the chipmaker in the quarter.

Its shares closed off 11/16, or 11 percent, to 5 7/16 Tuesday.

Earlier in the quarter, company officials warned its second quarter sales would fall below analysts' expectations, due to what it called a temporary component shortfall.

"Clearly, we are very disappointed with this quarter's financial results," said CEO Alex Leupp in a prepared release. "During the quarter, we were simultaneously faced with product transition, component supply and seasonality issues. As a result of our new Voodoo5 products not being available worldwide until late in the quarter, we lost new product revenue opportunity as well as existing product revenue due to consumers waiting to purchase our new products."

Making matters worse, 3Dfx (Nasdaq: TDFX) was tagged by a patent infringement suit from competitor NVIDIA (Nasdaq: NVDA).

NVIDIA claims that 3Dfx's graphics chip and card products infringe on five NVIDIA patents.

3Dfx officials vowed to fight the suit, calling it nothing more than a shakedown.

"NVIDIA's filing of a suit is clearly an attempt to force a settlement of our existing patent infringement lawsuit against NVIDIA," Leupp said in a prepared release. "3dfx intends to vigorously defend itself against this litigation."

NVIDIA is also asking the court to issue an injunction barring San Jose-based 3Dfx from manufacturing, selling or importing the chips and card products in question, including VooDoo3, Voodoo4 and Voodoo5 and VSA-100 family of products. It also seeks as well as monetary damages.

In the year-ago quarter, 3Dfx posted a loss of $11.6 million, or 50 cents a share, on sales of $104.8 million.

Last quarter, 3dfx posted a loss of $12.4 million, or 51 cents a share, on sales of $108.6 million.

Both analysts following the stock rate it a "hold."