AMD posts loss, warns of more to come
The chipmaker reports a pro forma loss that is in line with expectations, while warning of more losses to come in following quarters.
Losses, excluding special charges and other non-recurring events, totaled $97.4 million, or 28 cents a share, which was roughly in line with analyst expectations. Including special items, the net loss for the third quarter came to $186.9 million.
The Sunnyvale, Calif.-based chipmaker reported third-quarter revenue of $765.9 million, down 36 percent from a record $1.21 billion a year ago. Revenue fell 22 percent from the second quarter's $985.3 million.
AMD earlier this month warned it would post a net loss of between $90 million and $110 million because of a sluggish PC market, a vicious price war with Intel, and continuing declines in prices and demand for flash memory.
The losses, however, have hardly stopped. Although revenue could rise slightly in the fourth quarter, the company said in a statement that it likely will report an operating loss in the fourth quarter.
Depending on the size of the loss, AMD could once again find it's saddled with a loss for the year. The year 2000 marked the company's first profitable year in five years.
For the first nine months, the company reported pro forma net earnings of $44.8 million. If the loss for the fourth quarter exceeds that, results for 2001 could end up in the red.
"Operationally, we are doing great," AMD CEO Jerry Sanders said in a conference call following the earnings announcement. "Yields are great. Costs are under control. ASPs (average selling prices) are ugly."
Sanders' statement is borne out partially by the numbers. The company shipped 7.7 million PC processors in the third quarter, a record. Despite the price war, the company lost less than 1 percent of market share, he said. Average selling prices, however, declined by 20 percent. Revenue from processors dropped to $467 million from $625 in the same period last year.