AMD posts loss despite turnaround in PC market

Although the computer market is recovering, PC chip maker Advanced Micro Devices is still struggling to compete with chip giant Intel. That’s evident in the $128 million net loss the company reported today.

The loss wasn’t as bad as analysts expected, and AMD notes it has made a small profit on a non-GAAP basis. The net loss amounted to 18 cents a share, compared with a net loss of $134 million, or 22 cents a share, a year earlier. Analysts had expected a loss of 42 cents a share. Revenues were stronger than expected at $1.39 billion, down 21 percent from $1.78 billion a year ago. Analysts had expected revenue of $1.26 billion.

The results show the PC market is recovering from a horrible first half, and it offers corroborating evidence in support of Intel’s optimism for the PC market earlier this week that the PC market is recovering.

Sunnyvale, Calif.-based AMD expects fourth-quarter revenue to be up modestly. AMD shares were up 3 percent in after-hours trading.  AMD had a one-time $66 million, or 8 cents a share, gain from the repurchase of debt. In the second quarter, AMD revenues were $1.18 billion and its net loss was $330 million. On a non-GAAP basis, AMD had a profit of $2 million. Dirk Meyer, chief executive of AMD, said that the company has seen improved factory utilization, higher average selling prices for its microprocessors, which are the brains of PCs.

It’s worth noting that Intel’s average selling prices dropped in the third quarter, while AMD’s rose. AMD saw a 28 percent unit sales increase of laptop chips in the third quarter, compared to the second quarter. On a non-GAAP basis, AMD’s results show the financial picture at the AMD Product Company, which designs microprocessors. Last year, it spun off its manufacturing arm as Globalfoundries in a deal with the Abu Dhabi government. If you take out the manufacturing division’s results, then the AMD Product Company picture looks much better.

Next Story: Google's optimism backed by positive Q3 results
Previous Story: ZenNews app updates topical tagcloud every 3 seconds