US Report: AMD loses £39m in second quarter

Advanced Micro Devices (AMD) has disappointed analysts yet again, posting a loss of $64.5m (£39.3m), or 45 cents a share, on sales of $526m (£320m) in its second quarter. AMD shares closed unchanged at 18 ahead of the earnings report.

First Call consensus had expected the struggling chipmaker to report a loss of only 20 cents a share in the quarter.

"Weakening demand in the worldwide semiconductor industry, coupled with continued price pressures on flash memory products, produced a substantial decline in revenues from our non-microprocessor business units," said chief executive W.J. Sanders III in a prepared release.

Last quarter, AMD lost $62m (£37.8m), or 44 cents a share, on sales of $540m (£329m). In the second quarter of 1997, it earned $9.9m (£6m), or 7 cents a share, on sales of $594m (£362.2m).

Ashok Kumar, an analyst at Piper Jaffray, on Wednesday downgraded the stock to a "neutral" rating and lowered his earnings expectation for fiscal 1998 from a profit of 4 cents a share to a loss of $1 a share. Kumar also lowered his earnings expectation for fiscal 1999 from $1 a share to 50 cents a share.

"With (AMD's) debt structure approaching that of its Korean counterparts, the stock could test its support at its book value of $14 a share," Kumar said in his report.

For the quarter, total sales declined 3 percent from the first quarter and 11 percent versus the year-ago period.

AMD shares hit a 52-week high of 42 ¾ in August before tumbling to a low of 16 3/8 in December. Sixteen of the 25 institutional investment firms following the stock maintain a "hold" recommendation.