3Dfx Interactive expects its third-quarter financial results will be lower than analysts expected "due to a greater than expected seasonal slowdown in the retail channel." 3Dfx expects to lose several million dollars at the pre-tax operating level during the quarter, but added that, due to the August litigation settlement with Sega (arising over what 3Dfx called a breach in contract for Sega's next-generation console) it will post a profit for the quarter.

　　"There appears to be more inventory on hand at the retailers for Voodoo2 than originally forecast by our leading add-in board distributors. Although our Voodoo2 product continues to be the market leader, recent weeks have been slower than anticipated in the retail channel," saidGreg Ballard, 3Dfx president and CEO.

　　The Reuters news service reported that expectations (or at least analysts' expectations) were that 3Dfx would post a 47-cent-per-share operating profit for the third quarter.

　　"While we are disappointed with the third-quarter financial results to date, we believe that it is a seasonal setback that will be overshadowed by our ongoing acceptance by PC OEMs and an expected seasonal increase in retail sales during the next quarter," said Ballard.