CNET también está disponible en español.

Ir a español

Don't show this again

Tech Industry

AMD cuts 3Q losses, looks to sell communications unit

Athlon chips carried Advanced Micro Devices (NYSE: AMD) easily past third quarter estimates. And the company expects more to come.

In fiscal third quarter results released after market close Wednesday, the chip maker reported a net loss of $105.5 million, or 72 cents per share. First Call's survey of 19 analysts predicted a loss of 97 cents per share for the quarter ended Sept. 26.

Third quarter sales of $662.2 million represent gains of 16 percent sequentially and 1 percent year-over-year for ongoing operations. Flash memory sales increases of 28 percent combined with Athlon chips, which carry higher margins than their K6 predecessors, to help AMD cut its losses.

AMD experienced none of the production problems that savaged its results in earlier quarters. Processor sales gained 20 percent sequentially, said W.J. Sanders III, chairman and CEO of AMD. The company managed to sell hundreds of thousands of Athlon chips despite a shortage of compatible motherboards, particularly in the quarter's final week, when Taiwan's earthquake completely shut off board shipments.

More than 1 million Athlon processors will be produced in the fourth quarter, Sanders said. Although the Taiwanese quake has limited motherboards and related parts, AMD still expects to hit its original goal of more than 1 million Athlons sold by year end, Sanders said.

Also Wednesday, AMD announced plans to sell its 400-worker Communications Group. The unit, which makes integrated circuits for telecom applications, data communications and networking, generated third quarter revenue of about $70 million. AMD will focus on PC-related products, Sanders said.

Donaldson, Lufkin & Jenrette and Salomon Smith Barney have been hired to find buyers for the communications division. AMD expects to close the sale in the first half of next year.

Shares of AMD rose 13/16 to 19 7/16 in Wednesday's regular trading prior to the quarterly report. Of 22 Wall Street firms surveyed by Zack's Investment Research, 18 rate AMD the equivalent of a "hold", two recommend it as a "strong buy", one ranks it a "moderate buy", and one has a "strong sell" advisory on the stock.