Chip-maker AMD reports sixth quarterly loss in a row
Saturday, 19 April 2008, 18:14 IST
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San Francisco: One of the world's biggest chip makers Advanced Micro Devices (AMD) posted its sixth consecutive quarterly loss, but the company executives vowed a return to profitability in the second half of the year, the New York Times reported Friday. AMD Thursday reported a net loss in the first quarter of $358 million, or 59 cents a share, narrowed from a net loss of $611 million in the year-ago quarter. The net loss included an impact of $50 million, or 8 cents a share, related to the acquisition of the graphics technology maker ATI. A week ago, AMD warned investors that its sales for the quarter were lower than it had expected, blaming a "challenging economic environment" as well as normal quarterly weakness and lower revenue from older products. The company said first-quarter revenue was $1.5 billion, an increase of 22 percent over last year. "A seasonally weak first quarter was amplified by a challenging economic environment for consumers and lower-than-expected revenues of previous-generation products, resulting in lower-than-expected revenues in all business segments," said Robert J. Rivet, AMD's chief financial officer. Shares of AMD increased 12 cents, to close at $6.19 Thursday before the report, then rose slightly in after-hours trading. AMD's report contrasted with Intel's better-than-expected performance during the same quarter, leading some analysts to wonder how much of AMD's problem was of its own making and not a result of softening demand in a faltering economy. On Tuesday, Intel reported a 12 percent decline in net income, but company executives said they saw healthy demand the first three months of the year, typically one of the slowest periods for the technology industry. That strong demand, Intel executives said, helped offset weakness in the memory-chip business. David Wu, an analyst with Global Crown Capital, described the quarter as "ugly" but said that he thought it was "quite likely" that AMD would reach profitability by the third quarter, particularly given the strength of its new products. He added that whatever problems AMD was having were its own, not the fault of economic conditions. The company said it expected revenue would decline in the second quarter. Analysts were looking for flat revenue of $1.5 billion, according to Thomson Financial. In an effort to hasten the move to profitability, AMD said last week that it would lay off 10 percent of its work force, about 1,600 employees, and take an unspecified charge in the second quarter. On Thursday, AMD executives added that they expected more cost-cutting moves in the next few months.
Source: IANS
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