Diamond Multimedia Systems Inc, the San Jose-based maker of PC graphics accelerators and modems, has reported a second-quarter net loss of $10.8m on revenue down 25.3% at $128.7m, compared to a net loss of $8.3m in the year-ago period. Results for the year- ago period include a $1.4m restructuring charge. On a per-share basis, the loss amounted to $0.30. Excluding the losses incurred by the newly-formed RioPort division, which the company will spin out as a separate unit in the third quarter, the loss was $0.15. Still, analysts surveyed by First Call were expecting positive earnings of $0.03.
The company, set to be acquired by S3 Inc, says that the quarter’s results were negatively impacted by heavy investments in the RioPort business as it moves quickly to stake its claim in the emerging market for digital music over the internet. The quarter was also hit by moves to clear out inventories – especially of legacy products such as the 3Dfx-based offerings in the core graphics business and the 3Dlabs-based products in the professional graphics business – ahead of the merger with S3. Six-month net loss was $9.4m on revenue down 23.9% at $272.7m, against a loss of $357,000 last year.
