ATI earnings outlook
from Saturday, Dec. 13 Globe and Mail Report on Business:
Corporate: ATI earnings on tap
By ROMA LUCIW
Globe and Mail Update
Analysts expect ATI Technologies Inc. will continued to benefit from rising demand and deliver rosy results when it reports on its first quarter next Friday.
Investors seem to think so too. The Markham, Ont.-based graphic chip maker's stock has been on tear from its February 52-week-low of $5.50. On Friday, shares of ATI closed worth $20.24 on the Toronto Stock Exchange, not far from their year-high of $22. On the Nasdaq Stock Market, the stock has more than doubled in the past year.
In November, ATI raised its outlook for the three months ended Nov. 30, saying it expects adjusted net earnings of between 16 cents (U.S.) and 20 cents a share. Margins are expected to exceed original expectations of 32 per cent to 35 per cent while revenue will range from $440-million to $470-million, ATI said.
The Street provided equally optimistic forecasts for the months that include preholiday sales -- historically a strong period for the company.
ATI is expected to have earned 18 cents in the first quarter, up from 3 cents a year ago, according to a poll of 16 analysts by Thomson First Call. Sales are forecast to climb to $457.8-million from a year-earlier $322-million.
UBS Warburg analyst Michael Urlocker expects ATI's results will come in at the high end of expectations, saying that the desktop graphic chips market has resurged in recent months after a disappointing third quarter.
"We believe that ATI will continue to gain momentum due to strong products in both the desktop and notebook markets. We expect the company will gain market share in desktop in 2004, continue to capitalize on the growth in the notebook market into 2004 as well as continue to penetrate new markets including integrated graphics chips and consumer products," Mr. Urlocker wrote in a recent report.
More than 80 per cent of ATI's revenue is derived from the desktop PC and laptop market.