Doubtless as partly fallout from their merger with AMD, ATI's sales of chipsets for Intel CPUs have fallen dramatically. With original expectations of up to $660 Million for Q4 sales, it seems that they'll miss that mark by a huge margin of $140 Million. While this obviously hurts them and their investors, they see it as only a temporary setback:

The anticipated revenue shortfall is due primarily to lower sales volumes of integrated chipsets for Intel-based platforms, the company explained. In addition, handheld revenue was lower than expected, reflecting a supply chain adjustment by one of ATI’s major customers. “We believe this adjustment is temporary in nature and should not have a long-term impact on revenue,”
They also mentioned that they predicted this decline in sales for Intel chipsets, but that it came sooner than they had planned. It just goes to show how fickle the market can be, considering the merger is a long ways from being over.