Computer graphics chip company ATI Technologies
This was achieved with success across the board. All product areas grew: Desktop discrete chip revenue soared 40%; notebook chip revenue climbed 20%; and handheld and digital television products showed a five-fold increase over last year.
ATI has navigated the phasing in of the next generation PCI-Express cards with minimal rise in inventories quarter over quarter. The company is well positioned to reap profits once PCI-Express hits the mainstream. And ATI is looking forward to royalties from its deal with Microsoft
So, with excellent back-to-back quarters and a rosy outlook, what's not to like?
Well, Foolish (that's a capital F) investors know there is more to investing than the income statement. This quarter's balance sheet shows a 55.9% year-over-year increase in accounts receivable, outpacing the 50% growth in revenue. ATI addressed this issue in the conference call, citing higher shipments toward the end of the quarter and quoting a days sales outstanding figure at 50 days. These numbers bear watching in future quarters.
Bitter rival NVIDIA's
Lastly, ATI went through a boardroom shake-up earlier this year, and there are ongoing insider trading investigations. Those interested in ATI after the past record quarters may want to consider all these risks before taking the plunge.
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Fool contributor Tim Goh does not own any stake in the companies mentioned.