AMD posts Q1 net loss, plans IPO for Spansion

AMD recorded a first-quarter net loss due to the performance of its memory group, and has filed to sell shares in that group as part of an IPO.

Growing losses from its Spansion flash memory business have resulted in a second consecutive quarterly net loss at Advanced Micro Devices.

AMD has also announced that Spansion has filed a registration statement with the US Securities and Exchange Commission to sell shares as part of an initial public offering.

AMD's processor business had another excellent quarter, posting record revenue and profit figures. Overall company revenue was $US1.23 billion, slightly higher than the estimates of analysts polled by Thomson First Call. The processor business accounted for $US750 million of that revenue in the company's first quarter, which ended on March 27.

But Spansion's $US110 million loss in the quarter swamped the processor group's operating profit of $US92 million, and led to an overall net loss of $US17 million or loss per share of $US0.04 including the performances of AMD's other businesses. Analysts had expected AMD to post earnings per share of $US0.02.

In January, AMD chairman, president, and chief executive officer, Hector Ruiz, did not try to hide his disappointment with the performance of Spansion in the fourth quarter.

The flash memory unit was blamed for dragging AMD into a net loss for the fourth quarter, and financial analysts have called for AMD to separate itself from the volatile memory business.

Spansion had lost $US39 million during this quarter.

AMD owns 60 per cent of Spansion, Fujitsu owns the other 40 per cent.

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Tom Krazit

IDG News Service
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