Creative Technology Ltd, blaming a steep decline in CD-ROM drive prices, will report a significant loss in its third fiscal quarter and will also take a one-time, non-cash inventory charge of $20m to $30m (CI No 2,884): operating margins will be down from second quarter levels as a result of an industry-wide decline in market value of CD-ROM drives, down as much as 50%, it said; the company said the over supply problem resulted from a ramp-up in CD drive production which coincided with softer than expected personal computer sales.
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