Advanced Micro Devices Inc. (AMD) Thursday reported a first-quarter loss that narrowed from a year ago, due mainly to the absence of a hefty restructuring charge recorded last year. Revenues for the quarter plunged 31 percent from a year ago, but still managed to come in ahead of Wall Street's expectations. Loss per share for the quarter was also lower than what analysts estimated.
AMD's revenues have continued to trend lower in last few quarters. For the first quarter, AMD's revenues fell 31 percent to $1.09 billion from $1.59 billion a year ago, as demand for PCs and notebooks continue to drop with consumer preference edging toward tablets and smartphones. Analysts polled by Thomson Reuters expected revenues of $1.05 billion for the quarter.
AMD is heavily dependent on the PC industry, as it generates about 80 percent of its revenues from the sales of chips for PCs and notebooks. However, the current preference for tablets and smartphones --which uses chips made by other manufacturers-- have impacted AMD very much.
According to research firm Gartner Inc. (IT), worldwide PC shipments in the first quarter plunged 11.2 percent to 79.2 million units, the lowest level since the second quarter of 2009.
AMD is the only significant rival to behemoth Intel Corp. (INTC) in the processor market for personal computers, as it provides a cheaper option compared to Intel's processors.
Meanwhile, the company has taken several restructuring actions in order to refocus and diversify its portfolio.
Chief Executive Rory Read said, "We have largely completed our restructuring and are now focused on delivering a powerful set of new products that will accelerate our business in 2013. We will continue to diversify our portfolio and attack high-growth markets like dense server, ultra low-power client, embedded and semi-custom solutions to create the foundation for sustainable financial returns."
At computing solutions division, which includes microprocessors, sales decreased 38 percent, while revenues from graphics segment that includes video and multimedia products for desktops and notebooks, dropped 12 percent.
Net loss for the first quarter narrowed to $146 million or $0.19 per share from $590 million or $0.80 per share last year.
Excluding special items, adjusted loss for the three-month period was $94 million or $0.13 per share, compared to adjusted net income of $92 million or $0.12 per share last year. Analysts expected a loss of $0.17 per share for the quarter. Analysts' estimates typically exclude special items.
Looking forward to the second quarter, AMD expects revenues to increase 2 percent, plus or minus 3 percent, sequentially.
AMD closed Thursday's trading at $2.51, up $0.11 or 4.58%, on the NYSE. The stock, however, shed $0.08 or 3.19% in after hours trade.
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