AMD quitting handheld, TV chips amid more losses
The company will take a $876 million charge to get out of its handheld graphics and TV processor business, as it keeps looking for a way to return to profitability.
AMD continues to stumble through another down year.
The company announced along with the release of its second-quarter earnings results Thursday that it is getting out of the handheld and digital television businesses. As has been the case for , AMD is continuing to lose bucketloads of money: $1.2 billion this time around.
The $1.2 billion isn't as bad as it looks at first glance, but it's still pretty bad. In order to get out of the business of, AMD has to take a one-time charge of $876 million, which accounts for the majority of the loss.
The charge relates to the amount of goodwill attached to the company's $5.4 billion purchase of ATI Technologies in 2006: goodwill is an accounting term that in this case, stands for "the amount by which we overpaid." AMD attached $3.2 billion in goodwill to the ATI merger, andof that goodwill off its balance sheet with the divestiture of the former ATI's consumer chip business.
But even with the one-time charges out of the way, AMD lost $269 million on "continuing operations," such as its processor and graphics businesses. That's a little better than last year's loss of $531 million from those businesses, but AMD still has plenty of work turning itself into a profitable company in the second half of the year, its stated goal.
With, it's going to be a crucial six months for AMD CEO Hector Ruiz and his executives if they want to remain employed by the company in 2009. Despite getting its to customers and without incident--not to mention a --AMD still managed to lose money.