3dfx blames quake for shaky figures

Sales up, but profit is replaced by loss

3dfx yesterday blamed memory price hikes and the Taiwanese earthquake for its disappointing results for the third quarter. The graphics card manufacturer posted net losses of $17.6 million for the period ended 31 October, compared to pre-tax profit of $3.1 million for the quarter ended 30 September. Sales were $105.8 million, up on last year's $33.2 million. The figures included $3.6 million in goodwill and a restructuring charge of $1.8 million. This brought sales for the nine months ended 31 October to $251.1 million with pre-tax losses of $31.4 million. This compared to $141.8 million and net income of $19.6 million the previous year. "Our financial performance did not meet our goals as our gross margin was below expectations primarily as a result of higher memory prices; a greater OEM mix than we had anticipated, in addition to expedite charges for product resulting from the recent Taiwan earthquake," said Gordon Campbell, chairman at 3dfx Interactive. Sales of the Voodoo3 chipset continued to be strong, and the company had received "favourable response" to its new Voodoo4 and Voodoo5 product lines, Campbell said. The company also said it expected to make an announcement about the replacement for CEO Greg Ballard within the next few weeks. Details on 3dfx's Voodoo4 and Voodoo5, announced at Comdex, can be found here. ®