DOW JONES NEWSWIRES
Advanced Micro Devices Inc. (AMD) completed three straight years
of losses in the third quarter, but the chip maker was profitable
excluding impacts from its spun-off manufacturing operations, and
sales topped expectations.
The semiconductor maker also it expected fourth-quarter revenue
to be "up modestly" from the third quarter, echoing rosy outlooks
earlier this week from rivals Intel Corp. (INTC) and Altera Corp.
(ALTR). Analysts were expecting revenue of $1.36 billion, which is
lower than the third quarter's sales.
Still, shares were down 2.8% to $6.02 in after-hours trading.
The stock jumped nearly 75% since mid-August.
Chief Executive Dirk Meyer attributed AMD's $2 million core
profit to "strong demand for our product and platform offerings
combined with disciplined execution."
AMD, which makes chips used in personal computers, has struggled
with stiffening competition with Intel and its own financial
burdens, especially after its 2006 acquisition of ATI Technologies.
AMD's manufacturing spinoff bolstered its cash position. Some
analysts say AMD's new chips for portable notebooks and servers put
it in a position to regain market share against Intel in 2010.
In the latest quarter, AMD reported a loss of $135 million, or
18 cents a share, compared with a prior-year loss of $127 million,
or 22 cents a share. The latest results included a $66 million gain
from the repurchase of debt.
Revenue dropped 22% to $1.4 billion.
Analysts' estimates were for 42-cent loss on revenue of $1.26
billion, according to a poll by Thomson Reuters.
Gross margin fell to 41.9% from 51% amid the sales woes.
Shipments of microprocessors and graphic processor units were
flat, while the average selling prices of both types of chips were
down from a year earlier.
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
Kathy.Shwiff@dowjones.com