Wall Street Journal
AMD Loss Widens on ATI Charge
By DON CLARK
January 17, 2008 6:15 p.m.
Advanced Micro Devices posted a massive net loss in the fourth quarter, triggered by $1.675 billion in charges from its 2006 purchase of ATI Technologies.
But the chip maker came close to breaking even on an operating basis, and said shipments of microprocessors hit an all-time record. Significantly, AMD showed more progress than some analysts expected in selling a line of high-end microprocessors that had suffered from product delays and other problems.
"We are very pleased with the progress," said Hector Ruiz, AMD's chief executive officer, during a conference call with analysts.
AMD's shares, which have been trading well below their January 2007 52-week high of $17.88, traded at 4 p.m. yesterday at $6.34, off 23 cents, on the New York Stock Exchange. Following the news, however, AMD's shares edged up in after-hours trading to $6.44.
AMD, of Sunnyvale, Calif., has suffered from a series of miscues in competing with Intel Corp., which has successfully overhauled its product line after temporarily falling behind its smaller rival.
Partly to broaden beyond microprocessors -- the calculating engine in computers -- AMD paid $5.4 billion to buy ATI, a Canadian company that is best known for chips used to manage graphics. The deal was controversial on Wall Street, in part because of the debt AMD needed to complete it. Last month, AMD announced that it would write down the value of the value of the goodwill, or intangible assets, from ATI that were recorded at the time of the deal.
After those write-downs and other charges, AMD reported a net loss in the fourth quarter of $1.77 billion, or $3.06 a share, compared with a loss in the year-earlier period of $576 million, or $1.08. On an operating basis -- not based on standard accounting practices -- AMD said it posted a loss of just $9 million. Revenue totaled $1.77 billion, about flat with the $1.773 billion reported the prior year.
Robert J. Rivet, AMD's executive vice president and chief financial officer, pointed to a series of improvements compared with the third quarter ended in September. Total revenue rose 8% over that period, and the company's average prices for chips rose -- an unusual achievement lately because of the tough fight with Intel. Based on its sales, Mr. Rivet said the company believes it gained market share in microprocessor sales.
One of AMD's biggest issues has been its "quad-core" chips, which put the equivalent of four electronic brains on one piece of silicon. In December, the company disclosed a design flaw that forced it to offer a redesigned version of the chips that is not expected to become widely available until late this quarter or early in the second period. Nevertheless, the company said it shipped 400,000 quad-core chips in the fourth quarter.
Krishna Shankar, an analyst at JMP Securities, said that shipment figure impressed him. "I think the train may be getting back on track," he said.
But Avi Cohen, managing partner at the research firm Avian Securities, said AMD still faces an uphill battle catching Intel, which has more money to spend on improving its product designs and manufacturing processes. "This company needs to reinvent themselves and its unclear how they are going to do that," he said. |
Thread abonnieren
Zurück
