AMD reports narrower loss
- — 17 October, 2008 10:26
Advanced Micro Devices reported a quarterly loss again for its third quarter but managed to increase revenue 14 percent on sales of its microprocessors and graphics chips, the company said Thursday.
It was AMD's eighth consecutive quarterly loss, albeit a narrower one than the year before. The loss was US$67 million, or $0.11 per share, compared to a loss of $396 million, or $0.71 per share, in the third quarter of 2007. Revenue came in at $1.78 billion, up from $1.56 billion a year earlier.
The net loss is based on generally accepted accounting principles. On a non-GAAP basis, excluding a loss of US$108 million from discontinued operations, as well as other charges, AMD said it would have reported a profit for the quarter of $80 million.
Revenue from AMD's microprocessor unit climbed 8 percent year over year, to US$1.39 billion, while revenue from its graphics business climbed 40 percent to $385 million.
Last week AMD announced a plan to stem its losses by spinning off its chip-manufacturing business into a separate company. Analysts said the move could help AMD return to profitability by freeing it of the costly burden of building and maintaining its own manufacturing plants. The company would continue to design and sell its chips but have them manufactured by a third party.
AMD's shares were up 5 percent ahead of the report Thursday, closing at US$4.12. The stock moved 3 percent lower after the report was issued, dropping to $4.00 in after hours trading.
Financial results are being closely watched this quarter as industry tries to weigh the impact of the emerging financial crisis in the US on customers' IT spending. The news so far has been mixed.
On Tuesday AMD's main rival, Intel, reported third-quarter revenue of US$10.2 billion, a record for the company but up just 1 percent from the year earlier. Net income of $2 billion for Intel was up 12 percent from the same quarter in 2007. But Intel said it couldn't predict the impact of the financial crisis on customers going forward, and warned that companies may defer IT purchases.
Last week ERP (enterprise resource planning) software giant SAP warned that its revenue would be lower than expected when it reports earnings later this month, due to a sharp drop off in orders at the end of its quarter.