Computer graphics chip company ATI Technologies (NASDAQ:ATYT) followed last quarter's accomplishments with another stellar quarter. Year-over-year profit almost tripled in the fourth quarter, with net income of $61.2 million compared with $22.3 million a year ago. Fourth-quarter revenue was up by 50%, rising from $380.7 million to $572.2 million.

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 (NASDAQ:MSFT) to produce graphics processors for the Xbox 2. The company is optimistic about the future, raising first-quarter revenue guidance to $600-640 million.

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 (NASDAQ:NVDA) dominance in Doom III benchmarks is another area for concern. Why the emphasis on one game? Id Software's engines have a storied history of success, powering best-selling licensees such as Half-Life and Medal of Honor: Allied Assault. The revolutionary Doom III engine is the most spectacular in the industry today -- other developers will be lining up to license its technology. If ATI has not caught up by then, it will find itself losing benchmarks on more games. The 40% increase in desktop discrete chip revenue was a large factor in revenue growth, and ATI will not grow as fast if it cedes market share to NVIDIA because of performance.

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.