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Transmeta beats 4Q forecasts

Transmeta (Nasdaq: TMTA) lost more than analysts estimated for its first quarter as a public company, but revenue came in higher than expected.

After market close Thursday, the maker of low-power chips for mobile devices reported a fourth quarter net loss of $17.3 million, or 20 cents per share, excluding amortization. First Call's survey of two analysts produced a forecast of 17 cents per share.

Shares traded at 21.5093 in afterhours activity on the Island electronic communications network, immediately following the release of quarterly results. Transmeta rose 0.5 to 23.0625 in Thursday's regular trading ahead of the fourth quarter report.

Including amortization charges, Transmeta lost $26.2 million, or 30 cents per share.

Fourth quarter revenue of $12.4 million was almost 13 percent higher than the $11 million predicted by First Call consensus. Gross margin was about 42 percent.

Transmeta said it sees first quarter revenue increasing at least 50 percent sequentially. Gross margin for the March quarter should rise to about 44 percent as manufacturing yields increase, the company said.

For the full year, Transmeta lost $74.2 million, or $1.66 per share, excluding amortization. Including all charges, Transmeta lost $97.7 million, or $2.18 per share, on product revenue of $16.2 million.

Thursday's report marks Transmeta's first financial report since its initial public offering. Although the stock soared initially, it subsequently slid on disapointing news.

During the first quarter, the company announced a slew of customer wins, including NEC Corp. and Hitachi LTD and saw Sony Corp. ship the first Crusoe-based notebook, called VAIO PictureBook. But the PictureBook soon drew criticism for lackluster performance and average at best battery life. IBM also abandoned a much-touted project to graft a Crusoe chip into its ThinkPad 240 mininotebook.

The chipmaker celebrated Thanksgiving with the Comdex/Fall announcement of faster Crusoe chips, new versions of its Code-Morphing software and a new 256-bit processor cure, due in 2002.

Some PC makers apparently used a bad lot of Transmeta Crusoe chips to build notebooks. NEC Corp. recalled a small number of LaVie notebooks, about 284, in Japan and replaced their motherboards. Sony issued a warning to customers, though it did not recall any notebooks. Although it turned out to be a small event, Transmeta shares fell on the recall.

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