Tags: amd | chip | earn | semiconductor

Chipmaker AMD's Results, Outlook Beat Expectations

Thursday, 19 Apr 2012 05:12 PM

Chipmaker Advanced Micro Devices forecast revenue above expectations as it struggles against larger rival Intel in a lackluster PC market.

Shaky economies in Europe and the unsteady recovery in the United States, a growing consumer preference for tablets, and a recent shortage of hard drives due to flooding in Thailand last year have taken a toll on the PC industry.

"There was a decent Q1 number and decent Q2 guidance, and that's indicative of a rebound in PC builds as hard drives become more available," said MKM Partners analyst Daniel Berenbaum.

The chipmaker also faces stiff competition as Intel starts shipping its newest powerful PC chip, code-named Ivy Bridge, and builds sales of its recently launched Romley server platform.

AMD has been launching new processors of its own, and new CEO Rory Read has vowed to improve on long-standing execution troubles.

On Tuesday, Intel posted earnings confirming the PC industry is alive, but not kicking, in a report that failed to fuel new stock gains after a recent run-up.

Global PC shipments in the first quarter grew 1.9 percent, year-over-year, research firm Gartner said last week. That was better than the firm's previous forecast of a 1.2 percent dip in PC shipments.

Following major layoffs last year and a new, more flexible wafer agreement with contract manufacturer GlobalFoundries, AMD's stock has surged 44 percent so far this year, much more than Intel's 14 percent rise and the S&P 500's increase of about 10 percent.

In March, AMD dumped its equity stake in GlobalFoundries, three years after spinning off the company that makes most of its computer chips, in a move that frees it to strike manufacturing deals with other foundries.

AMD posted first-quarter revenue of $1.59 billion, down from $1.61 billion in the year-ago period. It estimated second-quarter revenue would rise 3 percent from the previous quarter, plus or minus 3 percentage points.

Analysts had expected AMD to post $1.56 billion in revenue for the first quarter and $1.59 billion for the current quarter, a sequential rise of 2 percent, according to Thomson Reuters I/B/E/S.

AMD had a net loss of $590 million, or 80 cents a share, compared to a net profit of $510 million, or 68 cents a share, in the year-ago period. Adjusted earnings were 12 cents per share, beating expectations of 9 cents.

Shares of AMD rose 1.63 percent in extended trade after closing flat at $7.97.

© 2017 Thomson/Reuters. All rights reserved.

 
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2012-12-19
Thursday, 19 Apr 2012 05:12 PM
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