ATI's Q2 Revenues Up, But Shareholder Lawsuit Drives Profits Down

Revenues for the quarter were $318.5 million, up 20% over last year. During the quarter ATI released the Radeon 9800 Pro, Radeon 9600 and Radeon 9200 visual processors, and saw continuing strong sales of the Radeon 9700 processor that was released last year. But ATI's net loss widened to $8.3 million (4 cents per share), compared to a net loss of $3.0 million (1 cent per share) a year ago. The company's loss was impacted by $10.8 million in charges related to allegations of insider trading by ATI executives, including K.Y. Ho, the company's CEO. Of that amount, $8 million was to settle all remaining shareholder class action lawsuits, for which it admitted no liability. The remaining $2.8 million in charges related to the investigation of insider trading allegations. In Q2 ATI also announced the closure its European manufacturing operations (ATEL) based in Dublin, Ireland. The company stopped its board manufacturing business and is now focused entirely on chips, and consequently no longer requires those manufacturing operations in Europe. As a result, it took a $2.8 million charge to close the operation.