By Benjamin Pimentel
Advanced Micro Devices Inc. on Tuesday reported a bigger first
quarter loss, but posted better-than-expected sales as Chief
Executive Dirk Meyer said the severe inventory corrections of the
prior quarter appear to have "stabilized."
AMD (AMD) reported a first-quarter loss of $416 million, or 66
cents a share, compared with a loss of $364 million, or 60 cents a
share, for the year-earlier period. Revenue was $1.2 billion, down
from $1.5 billion for the same period last year.
The results included a net unfavorable impact of $22 million, or
4 cents a share, the company said. AMD reported an operating loss
totaling $308 million.
Analysts had expected the Sunnyvale, Calif.-based chip maker to
report a loss of 66 cents a share on revenue of $1 billion,
according to a consensus survey by FactSet Research.
AMD reported results after formally spinning off its
manufacturing facilities into a new company called GlobalFoundries,
which analysts say should help ease the chip maker's financial
burdens.
In a call with analysts, Meyer also cited progress in inventory
correction in the semiconductor industry, and suggested the end
could be in sight.
"The global economic contraction continued in the first quarter
and while IT demand continued to be sluggish, it appears the severe
inventory corrections of the prior quarter stabilized and should
play out completely in the coming quarter," he said.
In a prepared statement, he cited the launch of the new company
and AMD's new products, saying, "The result is a more nimble AMD,
capable of achieving long-term success based on our strengths
designing and integrating industry-leading computing and graphics
technologies."
For the current quarter, AMD said it expects its product revenue
"to be down for the second quarter" as it cited "limited visibility
and historical seasonal patterns."
"The economy is still weak, making it very difficult to forecast
end-user demand levels, and we are heading into what is typically a
seasonally weak quarter," Meyer told analysts. "So you put all that
together and the outlook is murky at best and that results in our
forecast."
Analysts currently expect the company to report a loss of 53
cents a share, on revenue of $977 million, according to a consensus
survey by FactSet Research.
Broadpoint.AmTech analyst Doug Freedman noted that AMD posited a
"big top line beat."
"However the outlook of seasonal down second quarter likely has
investors concerned," he added.
Analyst Roger Kay of Endpoint Technologies Associates said, "The
slight beat in a bad market is mildly encouraging, although the
outlook is still pretty murky."
-Benjamin Pimentel; 415-439-6400; AskNewswires@dowjones.com