ATI Posts Higher Revenue For Q2, Beats Expectations

Revenues increased 20.3% over last year to $266 million, and gross margins improved by 1.8 percentage points to reach 33.8%. ATI said the 20.3% rise in revenues was primarily due to higher sales in the company's core PC markets, royalty revenue from sales of the Gamecube, and some recovery in the PC market. The company said the increases were partially offset by ATI's system integrator strategy, in which ATI delivers chips rather than boards into the system integrator channel, reducing revenue but improving the gross margin. ATI said it expects revenues and earnings to grow slightly in the fiscal third and fourth quarters.