Advanced Micro Devices Posts Second Straight Revenue Increase
October 20 2016 - 5:49PM
Dow Jones News
By Maria Armental
Advanced Micro Devices Inc. on Thursday reported a second
consecutive quarter of higher sales, fueled by customized chips for
videogame makers and its latest graphics products.
Shares, up more than threefold over the past 12 months, fell 4%
to $6.67, in afterhours trading on disappointing revenue
projections for the current quarter.
But the chip maker, which had expected to post an operating
profit in the second half of the year, saw its loss widen as it
booked a $340 million charge tied to the most recent changes to its
agreement with the company that makes most of its computer
chips.
The second-largest supplier of personal computer chips after
Intel Corp., AMD has reported four straight years of losses as PC
sales fell to historic lows, driving down its revenue by more than
$2 billion over that four-year period.
On Tuesday, Intel reported higher quarterly profit and said
revenue for its client computing group -- composed largely of PC
chips -- rose 4.5% from the year-earlier period.
Though PCs remain AMD's biggest business, the Silicon Valley
company is trying to reduce its reliance on developing chips for
videogames and semi-custom chips to order. Next year, AMD will
start selling its x86 core "Zen" processors, which is expected to
drive its re-entry into high-performance and server computing.
Over all, AMD's third-quarter loss more than doubled to $406
million, or 50 cents a share. Excluding the charges tied to the
changes to the Globalfoundries agreement and other items, AMD
reported a profit of 3 cents a share, compared with a loss of 17
cents a year earlier.
Revenue rose 23% to $1.31 billion, well above the company's
projection.
Analysts surveyed by Thomson Reuters had projected the company
would break even on an adjusted basis on about $1.21 billion in
revenue.
Gross margin narrowed to 4.5% from 31.1% in the previous quarter
and 22.5% a year earlier.
For the current quarter, AMD expects revenue to decline 15% to
21% from the third quarter, which the company blamed on seasonally
lower sales of semi-custom chips.
Analysts surveyed by Thomson Reuters had projected a 13%
decline.
--Don Clark contributed to this article.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
October 20, 2016 17:34 ET (21:34 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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