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Supply crunch stings 3dfx
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August 29, 2000: 6:57 p.m. ET
Parts shortage results in 36 percent revenue slide for PC graphics outfit
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NEW YORK (CNNfn) - 3dfx Interactive Inc., which makes graphics chips and add-on cards for personal computers, said Tuesday its fiscal second-quarter revenue had fallen more than 36 percent from the same period a year earlier.
During the period ended July 31, the San Jose, Calif.-based company said its revenue was $67 million, compared with $104.8 million reported during the same period last year.
Including $19.2 million in R&D expenses and $16.5 million in selling, general and administrative expenses, the company reported an operating loss before goodwill amortization of $25.5 million, or $1.13 per share. The single analyst polled by earnings tracker First Call expected an operating loss of 32 cents per share during the quarter.
Accounting for charges including $66.2 million in connection with an acquisition, 3dfx said its second-quarter net loss was $100.5 million, or $3.81 per share.
In late June, the company warned investors that its revenue for the quarter would fall short of previous expectations, saying it had not received a substantial portion of components from one of its suppliers. The company did not provide an estimated revenue projection at that time.
In a statement released Tuesday, Alex Leupp, 3dfx president and chief executive, said the components shortage meant it had to postpone shipments of a key product. The company's products are marketed under the "Voodoo" brand name.
"Clearly, we are very disappointed with this quarter's financial results," Leupp, said. "During the quarter, we were simultaneously faced with product transition, component supply and seasonality issues.
 "As a result of our new Voodoo5 products not being available worldwide until late in the quarter, we lost new product revenue opportunity as well as existing product revenue due to consumers waiting to purchase our new products," Leupp added.
Looking ahead, Leupp said the company will be shipping a full line of new Voodoo products across a variety of different price points in the current quarter. He also said the company's recent acquisition of GigaPixel Corp., which it closed during the quarter, would help it extend its reach beyond the PC.
In addition to PCs, GigaPixel also specializes in the design, development and licensing of 3D technology for game consoles and set-top boxes.
"With the recent merger completed with GigaPixel, we believe we have a very compelling future product roadmap to address the retail and PC [manufacturer] markets, in addition to compelling [technology] licensing opportunities in the emerging non-PC markets," Leupp said.
For the six-month period ended July 31, the company reported revenue of $175.6 million, up 20 percent from $145.3 million during the same period last year. Net loss for the first half of the fiscal year was $112.9 million, or $4.44 per share, compared with $13.8 million, or 71 cents per share a year ago.
3dfx (TDFX: Research, Estimates) shares slipped 69 cents to $5.44 in Nasdaq trade ahead of the news. They fell another 69 cents to $4.75 in after-hours trade. 
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3dfx
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