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AMD reports US$358 million loss

Advanced Micro Devices Inc’s first-quarter loss matched Wall Street’s lowered expectations, with the slumping chip maker hurt by its inability to unload older products and economic turbulence that damped down consumer spending.

The Sunnyvale, California-based company said on Thursday that it lost US$358 million, or US$0.59 per share, during the first three months of the year, its sixth quarterly loss in a row. AMD lost US$611 million, or US$1.11 per share, in the same period last year.

Stripping out US$08 per share in one-time charges connected to AMD’s acquisition of graphics chip maker ATI Technologies, the company lost US$0.51 per share in the latest period, matching the average estimate of analysts polled by Thomson Financial.

Sales of US$1.51 billion were 22 percent higher than last year and in line with analysts’ subdued expectations.

AMD warned earlier this month that sales across all business lines were lower than anticipated. It also announced plans to jettison 10 percent of its global work force, or about 1,600 workers, in an aggressive cost-cutting move to be completed by September.

Chief financial officer Robert Rivet blamed the first-quarter loss on seasonal weakness, the economy and lower-than-expected sales of old products.

He said that the company expects to become profitable on an operating basis in the second half of this year.

AMD has racked up more than US$4 billion in losses in a skid that stretches back to the last three months of 2006, when intensifying competition from larger rival Intel Corp and the costs of the ATI acquisition began to take their toll on AMD.

Lengthy product delays have also hurt AMD’s ability to win new customers and steal market share from Intel.

AMD’s new Opteron server chip — critical to the company’s financial recovery — was delayed for eight months after its official launch in September because of technical glitches. They didn’t roll out in force until this month, when Hewlett-Packard began shipping servers with the new chips.
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