Advanced Micro Devices Inc. (AMD: Quote), Thursday reported a slip to loss in the first quarter, hurt mainly by hefty charges related to a waiver agreement with GlobalFoundries Inc. AMD also recorded a slight decline in sales as demand for its chips used in PCs and notebooks weakened.
Nonetheless, excluding items, AMD reported a profit that rose from last year. Both earnings and revenues for the quarter topped Street estimates.
Looking ahead, AMD provided its outlook for the second quarter, stating it hopes to shore up its prospects by rushing in new products into the market. The company's shares are currently up more than 2 percent in extended trade on the New York Stock Exchange.
AMD said its first-quarter results included charges of over $700 million related to a negotiated wafer price mechanism with GlobalFoundries Inc., which was revealed in March.
AMD's revenue for the quarter edged down 2 percent from last year. AMD has its fortune tied to PC and notebook sales. But soft market conditions to an extent has impacted the PC industry, with customers switching to other devices. Another factor is the shortage of hard drives due to floods in Thailand last year. AMD competes with much larger rival Intel, which is the world's largest supplier of microprocessors with about 80 percent market share.
At AMD's Graphics segment revenue that includes video and multimedia products for use in desktop and notebooks, slipped 7 percent from last year. At Computing Solutions, which includes microprocessors, sales were almost unchanged from the prior year level, on flat mobile processor and chipset revenue.
CEO Rory Read said "A complete top-to-bottom introduction of new APU offerings, combined with ample product supply resulting from continued progress with our manufacturing partners, positions us to win and grow."
AMD reported first-quarter net loss of $590 million or $0.80 per share, compared to net income of $510 million or $0.68 per share last year.
Excluding items, AMD reported adjusted earnings of $92 million or $0.12 per share, compared to $56 million or $0.08 per share last year year. On average, 28 analysts polled by Thomson Reuters expected earnings of $0.09 per share for the quarter. Analysts' estimates typically exclude special items.
Sunnyvale, California-based AMD reported first-quarter revenue of $1.59 billion, compared to $1.61 billion last year. Twenty-nine analysts on consensus expected revenue of $1.56 billion for the quarter.
Looking ahead, AMD expects revenue to increase 3 percent, plus or minus 3 percent, sequentially for the second quarter 2012.
AMD closed Tuesday's regular trade at $7.97, on a volume of about 21 million shares. In after hours, the stock gained $0.08 or 1.00%. In the past year, the stock has ranged between $4.31 and $9.17.
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by RTT Staff Writer
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