AMD Posts Narrower-Than-Expected Loss
Still bleeding from a costly acquisition, Advanced Micro Devices accounted in the fourth quarter, for overspending $1.6 billion on a graphics chip-maker -- but it posted a narrower loss than analysts feared on surging sales of microprocessors.
AMD shares gained 2.21 percent in after-hours trade, having closed down 23 cents, or 3.50 percent, at $6.34 on the New York Stock Exchange.
The Sunnyvale-based company said after the market closed Thursday that it lost $1.77 billion, or $3.06 per share, during the three months ended Dec. 29. That compares with a loss of $576 million, or $1.08 per share, in the same period a year ago.
AMD is the world's No. 2 maker of microprocessors, the brains of personal computers. The company has faltered under intense pressure from Intel and in digesting the acquisition of graphics chip maker ATI Technologies, which AMD bought for $5.6 billion but recently said the price was too high.
AMD for the first time put a price tag on the error -- effectively saying it overspent by about 30 percent -- which dragged down results in the latest quarter.
AMD incurred charges in the fourth quarter of $1.67 billion, or $2.89 per share, mostly related to writing down the value of ATI.
AMD said those charges were not included in analysts' expectations. Stripping out those charges, AMD lost 17 cents per share. Analysts surveyed by Thomson Financial were expecting a loss of 36 cents per share.
Sales for the period were $1.77 billion, in line with Wall Street's estimates.
Higher average selling prices and double-digit percentage increases in the number of chips sold, compared with the third quarter, helped shore up the company's bottom line.
Analysts had long questioned the wisdom of the ATI acquisition, which AMD hoped would bolster its graphics capabilities and add valuable "chipset" technologies to its product lineup. Chipsets are responsible for sending data from the microprocessor to the rest of the computer.
AMD reduced the value of ATI's goodwill -- its intangible assets such as reputation -- by $1.6 billion.
For the full year, AMD rang up $6 billion in revenue, an increase of 6 percent over last year. The company lost more than half that much, $3.38 billion, on the year. The loss figure includes $2 billion in non-cash charges.
AMD shares closed down 23 cents at $6.34 before the results were released. In after-hours trading, the stock rose a penny to $6.35.