AMD Reports Loss, Lowers Revenue Guidance
Advanced Micro Devices posted a quarterly loss on Tuesday as the supplier of microprocessors felt pressure from a price war with Inteland booked costs from its $5.4 billion purchase of graphics chip maker ATI.
AMD posted a fourth-quarter loss of $1.08 a share. Excluding charges from the acquisition of ATI, AMD lost 4 cents a share -- well below the 10cent a share profit expected by analysts polled by Thomson First Call. The 4-cent loss was also below guidance in AMD earnings warning earlier this month.
AMD also reported a stock-based compensation of 5 cents a share.
Revenue for the fourth quarter was $1.77 billion, compared to $1.84 billion a year earlier, and slightly ahead of the $1.74 billion average Wall Street forecast.
AMD warned that first quarter revenue is expected to be between $1.6 billion and $1.7 billion. Analysts were predicting $1.82 billion.
AMD also said its gross margin took a big hit in the fourth quarter due to falling prices for server processors, and it gave a revenue forecast for the first quarter that was short of
Wall Street expectations.
"We believe we once again gained microprocessor unit share in the quarter," Chief Financial Officer Robert Rivet said in a statement.
Gross margin fell to 40% from 52% in the previous quarter and from 57% a year earlier.
The company said that it expected first-quarter revenue to be between $1.6 billion and $1.7 billion, shy of the $1.8 billion expected by analysts.
AMD, the No. 2 maker of PC processors behind Intel, said earlier this month that quarterly revenue would fall short of Wall Street expectations and that operating profit would fall from the third quarter, citing lower prices for its chips.
Shares in AMD have fallen more than 50% over the past year as investors grew concerned that its market share gains against Intel have stalled. The stock trades at 13 times expected 2008 profit, compared to 15.6 times for Intel.
AMD shares fell about 5% to $16.60 a share in after-hours trading.