Chip Maker Reports Loss but Claims Progress
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Advanced Micro Devices reported a larger-than-expected loss but showed progress in curbing its expenses and capturing a share of strong demand for personal computers.
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The computer maker's earnings hit estimates, but investors hoped for more.
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Worldwide&#160;lawsuits against Intel&#160;and&#160;four straight quarterly losses&#160;have distracted AMD during its integration of ATI Technologies, but the merger remains on track, according to industry analysts.AMD&#39;s acquisition of ATI&#160;for $5.4 billion, announced in July 2006 and completed one year ago Thursday, was viewed as a potent weapon in AMD&#39;s attempt to dent Intel&#39;s domination of the x86 processor market.The lawsuits against Intel and&#160;financial losses&#160;came at a critical time, when AMD&#39;s management needed help in integrating the ATI acquisition and making ATI employees understand AMD&#39;s culture, said Jon Peddie, president of Jon Peddie Research.AMD filed antitrust lawsuits alleging monopolistic behavior against Intel in the U.S. and Japan, and lodged complaints with the European Commission, the Korean Fair Trade Commission and Japan Fair Trade Commission.The distraction was compounded by the departure of key executives, including David Orton, former president and CEO of ATI, who resigned as executive vice president of AMD in July after only 10 months.AMD didn&#39;t have any internal problems, Peddie said, and Orton left on his own accord. &quot;A little redundancy will always occur in all organizations. It&#39;s not surprising to see people shift,&quot; Peddie said. However, outside speculation about the departure may have distracted AMD during the integration, he said.AMD also took an acquisition-related charge of $76 million, or $0.14 per share, in the third quarter of 2007 ending Sept. 29. That added to the quarterly net loss of $396 million.Despite the distractions, AMD is pulling its resources together to ensure the ATI merger goes smoothly.&quot;The merger has allowed AMD to merge its plans with ATI, which were very similar prior to the acquisition.&quot; Peddie said. Both companies wanted to amalgamate the CPU with the graphics processor, and the acquisition puts them in a position to do so.A successful merger could help AMD reach profitability in a few quarters and position it for success in the future, wrote Doug Freedman, an analyst with American Technology Research, in a research report.&quot;We believe ATI is turning the corner, which is likely material to AMD&#39;s quest for profitability,&quot; Freedman wrote.The acquisition of ATI hasn&#39;t shown an immediate benefit, but could help&#160;AMD in the long term&#160;when the company&#39;s &quot;Fusion&quot; project comes to fruition, Peddie said. Fusion is the code name for is AMD&#39;s next-generation processor design that is expected to combine high-performance graphics and CPU processing on a single die. The project was announced when the merger was completed. AMD is not prepared to talk about Fusion yet, but it is intended to bring the cost of PCs down and reduce power consumption, Peddie said.AMD also announced the &quot;Spider&quot; platform, which will include AMD&#39;s upcoming Phenom chips and high-end graphics processors to provide users with the &quot;ultimate visual experience&quot; in computing, said Dirk Meyer, AMD&#39;s president and chief operating officer, on the company&#39;s third-quarter earnings call last week.With all the attention focused on Phenom and Spider, ATI&#39;s involvement in other businesses gets sidetracked, said Phil Hester, senior vice president and chief technology officer for AMD. AMD&#39;s ATI unit is a big player in supplying graphics to consumer electronics, set-top boxes and gaming consoles, Hester said. ATI supplies graphics processing units (GPUs) for Microsoft&#39;s Xbox 360 and Nintendo&#39;s Wii consoles, Hester said.&quot;Discrete GPUs will continue to be a good business for us,&quot; Hester said. AMD&#39;s graphics segment revenue grew 29 percent to $252 million sequentially, driven by the success of the ATI Radeon HD 2000 series of graphics processors.However, ATI&#39;s market share in the discrete graphics market has been hit by manufacturing problems and bad timing in bringing chips to market, Peddie said. Competitors such as Nvidia and Silicon Integrated Systems stepped up by shipping graphics chips on a timely basis, taking market share away from ATI.&quot;Market share could begin to swing back towards ATI even if it introduced simply comparable products to Nvidia in the near-term,&quot; wrote Doug Freedman in a research report. ATI&#39;s RV670 graphics card is competitive in the mainstream market with current Nvidia products, Freedman wrote.But AMD still has work to do to make the merger a success. Its biggest threat remains Intel, which maintains a stranglehold on the chip market.&quot;AMD must rebuild its brand value in the enthusiast market in order to garner better mainstream adoption and consumer recognition,&quot; Freedman wrote.
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Advanced Micro Devices Inc  , the world's second-largest maker of computer  microprocessors, on Thursday posted a wider quarterly net loss  due to a $1.68 billion charge related to its purchase of  graphics chipmaker ATI.
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The chipmaker Advanced Micro Devices posted its third consecutive quarterly loss after cutting prices to compete with Intel.
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The video game maker largely met Wall Streetâs forecasts, despite posting a quarterly loss because of reorganization charges and deferred revenue.
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Advanced Micro Devices  (AMD), the world's second-largest maker of computer microprocessors, posted a wider quarterly loss on Thursday due to a $1.68 billion charge from its purchase of graphics chipmaker ATI.
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Chip maker Advanced Micro Devices  Inc. AMD.N on Tuesday reported a quarterly loss after a  year-earlier profit, weighed by weaker memory chip sales and a  charge related to debt.
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Advanced Micro Devices Inc.'s losses were deeper than analysts feared in the third quarter, but the slumping chip maker said stronger sales of microprocessors and improving cost controls are now helping lift the company out of its financial doldrums.
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SANTA CLARA, Calif. Intel chief executive Craig Barrett says his company has &quot;recovered&quot; from product missteps that plagued the chip maker during the first half of the year.
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Struggling chip-maker Advanced Micro Devices Inc. warned Monday it is "unlikely to meet" its revenue guidance for the first quarter.
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Analysts said a full-fledged recovery for the Chinese computer maker isn't yet in sight.
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The chipmaker posts record revenue, but profits go lower. You're not really surprised, are you?
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The chipmaker gets another downgrade on Friday.
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After its recent delays and missteps, chip maker sets its sights on a dual-core future.
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The chipmaker says its revenue for the ongoing quarter will be $8.3 billion to $8.6 billion, down from the previous estimate of $8.
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The chip maker now expects revenue of between $8.3 billion and $8.6 billion due to lower-than-expected worldwide demand for its processors as well as "customer reductions in component inventory levels."