AMD loses $1.77 billion in December quarter

AMD loses $1.77 billion in December quarter

Summary: AMD on Thursday reported a fourth quarter net loss that equaled its revenue total.AMD reported a net loss of $1.


AMD on Thursday reported a fourth quarter net loss that equaled its revenue total.

AMD reported a net loss of $1.77 billion, or $3.06 a share, on revenue of $1.77 billion. Revenue was up 8 percent from the third quarter and was flat from a year ago. The loss includes charges of $1.67 billion, or $2.89 a share, which were mostly operating.

While the loss is staggering it's not the complete train wreck it appears. AMD took a $1.61 billion charge for the impairment of goodwill related to the ATI acquisition. AMD's impairment charge equates to a confession that the ATI purchase didn't deliver the results it was supposed to.

Once you exclude all the charges--and there are a lot of them--AMD had a non-GAAP net loss of $97 million. AMD came out with a non-GAAP operating income loss of $9 million. But that $9 million carries the following footnote:

In this press release, in addition to GAAP financial results, AMD has provided non-GAAP financial measures for operating income (loss) and net income (loss) to reflect its financial results without charges for the ATI impairment of goodwill and acquired intangible assets, ATI other acquisition-related charges, and severance charges for operating income (loss) and in addition, without the tax benefit from ATI acquisition-related charges, investment impairment charges and debt-related net charges for net income (loss).

If you back out AMD's various items you come up with a fourth quarter loss of 17 cents a share. According to Thomson Financial AMD was expected to report a loss of 36 cents a share on sales of $1.78 billion. Given the afterhours stock reaction Wall Street isn't entirely bent out of shape over the results, but isn't exactly chipper either. Optimists can argue that AMD beat estimates--if you exclude more than a billion dollars of charges.

In a statement, AMD CFO Robert Rivet said the following:

“We were close to break-even operationally for the quarter, reducing our fourth quarter non-GAAP operating loss to $9 million. We improved gross margin by three points sequentially, driven by increased shipments of new products, higher average selling prices and cost containment actions. We shipped a record number of microprocessor units in the quarter, including nearly four hundred thousand quad-core processors.”

As for the outlook, AMD expects "revenue to decrease in line with seasonality."

Topics: Processors, Banking, Enterprise Software

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  • Kind of worried

    We need AMD in the silicon chip industry. They are the only competition to Intel. And while they may have broken even for the quarter (once you discount the charges) they cannot continue with those kins of quarters.

    I still feel that their purchase of ATI was not the right thing to do. I know they wanted to be able to provide a complete package with CPU/Chipset/GPU but they could have done that without blowing the cash on ATI.
  • Don't count the charges?

    Well heck, then I am filty rich. All I have to do is not count my costs and expenses.

    Bottom line, AMD is in deep ka ka and they are trying desperataley to spin it into something else.
  • Sounds to me like...

    ...the OLPC folks need to mend some fences with Intel... otherwise, their ship is sailing with a major breach in its hull.
    Confused by religion
    • Not really ...

      They can go with a VIA C3 or a Transmeta Crusoe or Efficeon processor. They may be low-end CPUs, but Linux runs perfectly on them.

      Transmeta would probably jump on the chance to revive their processor lineup and actually make some money for a change (according to Wikipedia they only made $44,000 last year).
  • Won't the antitrust tussle

    paint them a rosier future?