Avid Technology reported a $19.5m increase in sales year-on-year during the three-month period ended December 31 - but shareholders are not happy with the company's profitability.

Revenues at the manufacturer of digital media content tools were $258.5 million for the three-month period ended 2007 compared to $239.0 million for the same period in 2006.

Gross profits were up from $114m to $122m.

"Though sales and cash flow were strong, we are disappointed with the lower than expected earnings performance and need to improve our profitability," said Gary Greenfield, Avid's chairman and chief executive officer.

"As we continue with the transformation of Avid into a more efficient and customer-focused organization, we are taking a long-term view that we believe will ultimately return the most value to our shareholders."

Revenue for the year ended December 31, 2007 was $929.6 million, compared to revenue of $910.6 million in 2006.