Advanced Micro Devices Inc (AMD) cut its fourth-quarter loss, but not as sharply as Wall Street had hoped, as the chip maker absorbed a big charge for the falling value of an acquisition.
Sunnyvale-based AMD said on Thursday that it dialed back its net loss to US$1.4 billion, or US$2.34 per share, in the latest period. The loss was US$1.8 billion, or US$3.06 per share, in the fourth quarter of 2007.
AMD is paying heavily to write down the value of its 2006 acquisition of ATI Technologies, a maker of graphics chips that AMD bought for US$5.6 billion. After several write-downs, AMD now believes ATI is worth less than half that. AMD took a US$684 million charge in the latest period to write down ATI’s value. That charge increased AMD’s loss by US$1.12 per share.
Excluding that and other one-time charges, AMD lost US$0.69 per share, which was wider than the US$0.54 per share predicted by analysts polled by Thomson Reuters.
Sales fell 33 percent to US$1.16 billion, short of the average analyst estimate for US$1.2 billion.
The company also expects sales to fall again in the first quarter.
“It was definitely disappointing and worse than what we expected — AMD certainly has a challenging road ahead,” said Betsy Van Hees, an analyst with Caris & Company.
AMD has lost money in the last nine quarters, racking up nearly US$7 billion in losses in a grim stretch of its 40-year history.
To try and shore up its finances, AMD is in the throes of a major restructuring, the biggest piece of which is a plan to split off its factories into a separate company.
Other elements of AMD’s makeover include replacing its chief executive, announcing 3,300 job cuts over the last year, and selling nearly a fifth of the company to Mubadala Development Co, an investment arm of the Persian Gulf state of Abu Dhabi.