Losses Continue to Mount For AMD
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Advanced Micro Devices posted its sixth-consecutive quarterly net loss on Thursday, as the chipmaker continued to lose market share to far larger rival Intel.
AMD (NYSE: AMD), which lost market share to Intel (NASDAQ: INTC) last year as its chip-making technology lagged that of its larger rival, said its first-quarter net loss actually narrowed to $358 million, or 59 cents a share, from $611.0 million, or $1.11 a share, a year ago.
Revenue advanced 22 percent to $1.51 billion from $1.23 billion.
The poor results came even as Intel and other high-tech companies like International Business Machines Corp have so far posted generally positive earnings.
"In the seasonally down second quarter, AMD expects revenue to decrease in line with seasonality," the company said in its financial results report.
Gross margin in the first quarter was 42 percent, down from 44 percent in the fourth quarter, but up from 28 percent in the year-ago period.
AMD, based in Sunnyvale, California, warned on April 7 that it would cut 10 percent of its work force, or about 1,680 jobs, and gave a first-quarter revenue estimate below expectations, sending its shares down as much as 5 percent that day.
Citing far lower-than-expected sales across its businesses, AMD estimated revenue for the quarter ended March 29 at about $1.5 billion, well below the average analyst forecast at the time of $1.62 billion, according to Reuters Estimates.
Shares of AMD have fallen 55 percent in the last 12 months, based on Wednesday's closing prices, compared with a 7 percent gain for Intel. The Philadelphia Stock Exchange Semiconductor Index is down 22 percent over the same period.
Intel stock trades at about 3.0 times its estimated 2008 sales, compared with 0.55 for AMD, according to Reuters Estimates.
Despite the lackluster earnings, shares of the company ticked higher in extended trading, as its general comments on the second quarter were in line with normal seasonal trends.
"The stock is up due to a bit of relief that things weren't worse," said CRT Capital Group analyst Ashok Kumar.
Shares of AMD rose 12 cents, or 2 percent, to close at $6.19. In extended trade, the stock gained 2.4 percent to $6.34.