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AMD reports loss, cautious on PC sales

Chipmaker's first-quarter revenue hits $1.18 billion, down 21 percent from last year but better than reported estimates from analysts.

Updated at 3:20 p.m. PDT throughout.

Advanced Micro Devices on Tuesday reported a net first-quarter loss of $416 million, or 66 cents a share, though revenue exceeded estimates.

AMD also refuted Intel statements that PC sales have hit bottom, though the company said inventory problems are improving somewhat.

This loss exceeds the loss reported one year ago, when the chipmaker posted a loss of $364 million, or 60 cents a share.

Revenue hit $1.18 billion, down 21 percent from the $1.5 billion posted last year, but better than reported estimates from analysts who had expected revenue of about $1 billion.

"Considering current macroeconomic conditions, limited visibility and historical seasonal patterns, AMD expects its Product Company revenue to be down for the second quarter of 2009," the company said in a statement.

Chief Executive Dirk Meyer refuted Intel sentiment about PC sales recovering. During Intel's first-quarter earnings conference call last week CEO Paul Otellini said that PC sales had "bottomed out" during the first quarter.

"I don't know how anybody can say we've hit bottom, considering the macroeconomic outlook," Meyer said during the AMD earnings conference call Tuesday afternoon.

"The economy is still weak, making it difficult to forecast end-user demand," Meyer added. AMD's factory utilization dropped off precipitously during the Christmas time frame and underutilization continued in the first quarter, Meyer said.

The AMD CEO also said that the average selling prices of notebook PCs was down because of a "shift toward lower-cost machines," in a reference to low-cost Atom-based Netbooks, among other notebook products.

On the upside, AMD is accelerating its shipment of the six-core "Istanbul" server chip, which will now be available in June, Meyer said. And the company is readying a successor to its single-core Neo processor for low-cost ultra-thin notebooks: the dual-core Congo processor will ship "in the back half of the quarter," Meyer said.