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ATI Technologies, Inc. (ATYT) Message Board

  • smallormidcapman smallormidcapman Mar 24, 2005 6:16 PM Flag

    The general impression I got on CC

    from the tone and context of the analayst's questions:

    1. Concern over Q3 guidance being seasonally lower than typical sesonality.
    2. Consumer revenues less than 10% this Q compared to over 16% last quarter.
    3. They will fall short of "2 x" growth in consumer business this year per Orton "just short of 2x".
    4. The ramp in revenues has not resulted in appreciation of the GM rate as GMs have stagnated. 1 analysts said "not unlike NVDA the past 2 years".
    5. The ramp in revenues is being offset by higher op ex and R&D thus mitigating any potential EPS appreciation.


    What they failed to fully realize because it was POORLY explained is:

    1. Options expensing is a major plus for ATI compared to other tech companies.
    2. The royalty streams were never fully explained and touted as "100% margin" and never heard "$75-100 million per year".
    3. The potential impact of R520 and how that platform will allow ATI to recapture share and penetrate other markets.
    4. The importance of the share repurchase program and how this could materially benefit ATI as well as the shareholders.
    5. The importance of migrating to a non-capacity restrained process like .11 and .09 for the products after the "$60 million left on the table" comment last quarter.

    All in all the CC was another example of how poorly ATI understands the business of selling themselves. They wanted to keep it short and try not to get hammered too bad on the revenue miss and poor guidance. The color for Q4 guidance was poorly explained and one has to wonder if they can in fact pull off a great quarter in Q4 following a projected down Q3. I have to wonder what will be the catalyst (no pun intended) for this stock for the next 3 months. The increased inventory needs to pay off in higher market share and product availability otherwise I just don't understand why the 50% ramp in inventory.

    Orton has yet to show me that he is anything other than a brilliant engineer and was the father of R3xx. The selloff at the end of the day was ominous and I repeat my "we will be lucky to hold $16" comment from this AM.

    The pom pom crowd can now flame away. At least have the decency to understand that I am long 10,000 shares and kindly provide facts to backup your flames.

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