AMD to Lose More than Its Income during the Fourth Quarter
Advanced
Micro Devices recently announced a bigger quarterly
loss which occurred after the chip producer paid $1.68 billion charge for
having acquired the ATI, which is a Canadian company that manufactures graphics
chips.
Despite the fact that the chip maker was able to realize revenue of $10.1 billion, plus operating income $2.2 billion and net income $1.9 million, Advanced Micro Devices could only generate its quarterly revenue of $1.770 billion, having a net loss of $1.722 billion and registering an operating loss of $1.678 billion. The whole picture looks as follows: the chip manufacturer registered revenue of $6.012 billion along with a net loss of $3.379 billion. Together with AMD, ATI also showed some negative results. Analysts say that the company is currently valued 30 percent less that the money the CPU paid for it 2 years ago. It is worth mentioning that in 2006 CPU acquired the company for $5.4 billion.
"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," outline Robert J. Rivet, AMD CFO.
According to his calculation of the 3rd quarter of 2007, Rivet predicts company's short breaking during the fourth quarter. Together with AMD CEO Hector Ruiz, Rivet showed pessimism. They both denied having guaranteed that the chip maker would break throughout the Q4. The company's representatives informed that AMD was able to ship "a record number of microprocessors" during Q3. This includes 400,000 quad-core CPUs.
AMD's computing division was the one to realize $1.4 billion, which is about 79% of the company's revenue. The graphics business registered revenue of $259 million (a three percent increase in 2007 versus 2006).
On the stock market the chip manufacturer fell by 3.5 percent (decreasing by 23 cents), however in after hours the company's stock went up by 1.7 percent (an increase on 11 cents). After the stock closed at $6.34, decreasing by 3.5%, AMD registered a market capitalization of $3.52 billion.