Happy news first: The firm returned to profitability for the second quarter. Earnings came in at $0.17 per share, compared with a penny loss in the prior-year period. (Note to ATI newbies: The U.S. generally accepted accounting principles (GAAP) numbers are at the bottom of the release.)
ATI's revenue growth was the real catalyst. A 48% sales increase brought the quarter's top-line take to $463 million. Most of the growth came as a result of increased sales to PC makers. But, as with competitorNVIDIA
Looking ahead, the company is throwing aside concerns about the seasonal weakness for the third quarter and it expects revenues in a range that would match this quarter's number. But it's not all confetti and party hats for ATI.
Founder and CEO K.Y. Ho is stepping down, and Dave Orton, the president and chief operating officer, will take over the CEO spot. Chief Financial Officer Terry Nickerson's retirement was also announced. Ho will stay on as chairman.
Little reason was given for the shuffle, though the suspicion seems to be that this is a response to the ongoing insider-trading investigation by the Ontario Securities Commission. Ho is one of six individuals being scrutinized for insider trading. Others include his wife, plus the former head of investor relations and her husband. The charges won't be dealt with until the fall.
At $17 per share, ATI has provided a nice triple so far off its 52-week low, and the return to black ink on the bottom line is a welcome sight. But ATI's performance is a bit too schizophrenic for my tastes (kind of like its graphics drivers, which have confounded me too many times). So, while the Street applauds today's earnings, investors ought to take a look at the insider-trading charges and the boardroom shake-up and decide if ATI is running the company in their interests.
Can't get your graphics drivers working properly? Try a desperate plea on the Fool's Help with this STUPID Computer board.
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