AMD reports Q4 loss on weak graphics sales

AMD said sales of its graphics chips were hurt by the hard-drive shortage caused by flooding in Thailand

Advanced Micro Devices reported a fourth-quarter net loss Tuesday on weak sales of graphics chips and charges related to a restructuring.

AMD reported a loss of US$177 million for the quarter ended Dec. 31, compared to a profit of $375 million in the same quarter a year earlier.

The loss includes a $209 million charge related to AMD's investment in Globalfoundries and a restructuring charge of $98 million. The restructuring charge follows AMD's announcement in December that it will lay off 10 percent of its workforce to reduce costs.

Excluding the charges, AMD would have made a profit of $138 million and earnings per share of $0.19, the company said. That beat the consensus analyst forecast of $0.16 per share, according to Thomson Reuters.

AMD's revenue for the quarter was $1.69 billion, flat from a year earlier.

Revenue from AMD's graphics segment decreased 10 percent, to $382 million, AMD said. The decline resulted partly from the hard-drive shortage caused by flooding in Thailand, which reduced demand for add-in graphics boards, said CEO Rory Read on a conference call.

But average selling prices for graphics processors increased both sequentially and year over year, AMD said.

Read sounded positive about the graphics market going ahead, even though graphics chips are increasingly being integrated with CPUs. AMD hopes to get back on track with its latest Radeon HD 7970 graphics processor, which was launched in December.

AMD's Computing Solutions segment, which makes CPUs and chipsets, performed better, with revenue up 7 percent year over year to $1.3 billion, helped by sales of mobile processors and chipsets.

AMD is on track to launch new laptop chips code-named Trinity by midyear, Read said.

"With the next-generation product Trinity we are well ahead of the pace," Read said. The chips will enable thinner laptops and better performance-per-watt than their predecessors, he said.

AMD has said Trinity chips will come in dual- and quad-core options, and give the same performance but consume half the power of its current A-series laptop chips.

The restructuring efforts will help AMD to fund new opportunities in low-power computing, cloud computing and emerging markets, Read said.

"No question, we have more work to do," he said.

AMD will share more details about its plans at its analyst day in Santa Clara, California, on Feb. 2.

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Agam Shah

IDG News Service
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