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ATI Tech beats the Street
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January 11, 2001: 1:43 p.m. ET
Graphics chip maker edges estimates, see weakness moving ahead
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NEW YORK (CNNfn) - Graphics chip maker ATI Technologies reported a fiscal first-quarter profit Thursday that narrowly beat expectations but warned that it is cautious about the next two quarters due to weakening demand for personal computers.
Before the U.S. markets opened, ATI (ATYT: Research, Estimates) said its operating profit for the quarter was $11.8 million, or 5 cents per share.
That beat the consensus estimate of analysts polled by earnings tracker First Call by a penny but is 78 percent below the $53.6 million, or 25 cents per share, the Ontario-based company reported during the same period a year earlier.
Total revenue for the quarter was $350.5 million. That was a 20.8 percent increase over the prior quarter but a 15.2 percent decline from the $413.5 million in revenue the company reported in the year-ago period.
 Despite the slowdown in the personal computer market, the most recent quarter marked ATI's return to profitability after posting two quarter's of losses.
Executives credited improved sales of ATI's Radeon-brand 3Dgraphics accelerators as well as strong sales of the company's chips for mobile computers for the upside.
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ATI is the world's leading supplier of graphics accelerator chips, which are designed to speed up video and graphics operations by handling the processing of those functions, freeing up the computer's central processor to carry out other tasks.
Looking ahead, executives said they are viewing the next two quarters "with caution" due to weaker demand and higher PC inventories, which have led to cost-competitiveness and uncertainty.
Terry Nickerson, ATI's chief financial officer, said he expects revenue in the fiscal second-quarter will fall below $300 million, with operating earnings around the breakeven level.
ATI shares rose 16 cents, or 2.6 percent, to $6.16 on Nasdaq early Thursday afternoon. That's down 73.4 percent from their 12-month high of $23.18 and 12.8 percent above a low of $5.46. 
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ATI Technologies
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