ATI Technologies updated its financial guidance for the first quarter of its fiscal 2004. The company now expects higher revenues and also even higher profit margins in the quarter ending on the 30^th of November, 2003, according to the Markham, Ontario-based firm’s estimates.

“Broad-based demand for ATI’s PC products, particularly in the desktop business, has contributed to the greater-than-expected sales this quarter,” said David Orton, President and Chief Operating Officer of ATI Technologies.

ATI now expects revenue to be in the range of $440 to $470 million. Adjusted net earnings are expected to be in the range of $0.16 to $0.20 per share. Earlier this year ATI estimated its sales in the Q1 of fiscal 2004 to be between $400 and $430 million, net income to be “marginally higher” than $0.09 per share in the fourth quarter of fiscal 2003. ATI expects to see continued strength in the second quarter, but a typical seasonal pattern, resulting in a slightly weaker revenue and profit profile. 

“This demand, coupled with a stable price environment, has also contributed to gross margins that are expected to exceed original expectations,” Orton added.

Some sources close to the channel assume that ATI Technologies has been experiencing some breakthroughs in sales of its RADEON 9200 and RADEON 9600-series of graphics processing units.

It is not exactly clear whether ATI Technologies’ higher than expected revenue was pushed by the demand for ATI products, or because of the growth of the market.

According to Gartner, worldwide PC shipments will total 47.2 million of units in the fourth quarter, up 12.4% from the same period last year. Aggregated sales of personal computers in the year 2003 are said to increase 10.9% versus 2002 and are expected to reach 164.3 million units. Earlier Gartner projected 8.3% growth over 2002. Overall growth of PC shipments could also be a reason for ATI’s boosted projections.