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AMD's 1Q Loss Will Widen With $11.5M Class-Action Suit Settlement
(04/23/98; 2:22 p.m. ET)
By Patrick Waurzyniak, Electronic Buyers' News
Advanced Micro Devices said Thursday that it has reached a tentative agreement to settle a 1995 class-action lawsuit that will cost the chip maker $11.5 million and result in widening AMD's previously disclosed first quarter 1998 loss to nearly $63 million.
AMD (company profile), in Sunnyvale, Calif., said the settlement of the class-action lawsuit, filed in November 1995 by shareholders against AMD and some of the company's current and former AMD officers and directors, relates to the company's K5 microprocessor development project.
AMD's K5 microprocessor was plagued by frequent delays and chip yield problems similar to those AMD has encountered more recently with its next-generation K6 chip development, which AMD recently said it had solved.
If approved by AMD's board and by the U.S. District Court in San Jose, Calif., the lawsuit settlement will cost AMD $11.5 million and cause the company to adjust, net of tax, its 1998 fiscal first quarter results. The settlement will increase the chip maker's first quarter net loss from $55.8 million, or 39 cents per share, by 5 cents per share to a net loss of $62.7 million, or a 44-cents-per-share net loss. Analysts' consensus estimates were for AMD to post a 29-cents-per-share net loss for the first quarter. |
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