AMD expects another operating loss this quarter
SWEET !!
By EBN
Oct 17, 2001 (2:44 PM)
URL: ebnews.com
Advanced Micro Devices today reported third quarter net sales were $765,870,000, a decline of 22% compared with sales of $985,264,000 in the second quarter of 2001. AMD reported sales of $1.2 billion in the third quarter of 2000.
The pro forma net loss for the quarter, which excludes one-time charges, amounted to $97,424,000, which was equivalent to 28 cents per share.
The pro forma net loss excludes the effects of restructuring and other special charges amounting to $89.3 million and additional inventory provisions amounting to $6.9 million. These charges were associated with the company's previously-announced plans to close wafer fabrication facilities and reduce other manufacturing activities and administrative support that primarily serve AMD foundry service operations.
The pro forma net loss also excludes the effects of a charge amounting to $22 million for impaired investments. Total pro forma adjustments, net of tax credits, amounted to $89.5 million.
The total net loss under GAAP (generally accepted accounting principles) for the third quarter of 2001 was $186,929,000, which amounted to 54 cents per share on 345,044,000 shares outstanding. In the second quarter of 2001, AMD reported net income of $17,352,000, which amounted to $0.05 per diluted share.
Net sales for the first nine months of 2001 were $2.9 billion compared with $3.5 billion for the first nine months of 2000, a decline of 15%.
Pro forma net income for the first nine months of 2001 amounted to $44,766,000, or 13 cents per diluted share. Pro forma net income for the first nine months of 2000 amounted to $615,792,000, or $1.81 per diluted share.
The total net loss under GAAP for the first nine months of 2001 was $44,739,000, or 14 cents per share. Net income for the first nine months of 2000 was $805,058,000, or $2.36 per diluted share.
Memory Group sales in the third quarter of 2001 at $210 million declined by 34% from the second quarter of 2001, reflecting continuing weakness in the communication sector and excess inventories of flash memory devices at major customers.
The company reported record unit sales of AMD Athlon and Duron processors in the quarter. Total PC processor unit sales for the third quarter of 2001, at more than 7.7 million units, remained at the record level of the immediate-prior quarter. In the face of very aggressive competition from Intel, average selling prices (ASPs) for PC processors declined by 20% sequentially.
"AMD held market share in the 22 percent range in a very weak PC market made more difficult by our principal competitor's efforts to halt our forward momentum," said W. J. Sanders III, chairman and chief executive officer, in a released statement.
"Those efforts have failed as the performance deficiencies of computers based on Intel's Pentium 4 processors have become increasingly evident. Nevertheless, drastic price cuts and large, cash-backed marketing programs from Intel had the effect of driving down ASPs on PC processors in the market segments where we compete directly."
For the current quarter, demand for flash memory devices from new customers is expected to offset continuing weakness in demand from customers in the communications sector, where inventories continue to exceed desired levels. The company projects that Memory Group sales in the fourth quarter will range from unchanged to growth of 10% over the level of the third quarter of 2001.
The company said it expects that the normal seasonality that was to have benefited the PC market in the fourth quarter will be muted at best in light of the impact of global economic uncertainty on consumer spending.
Unit sales of PCs are expected to grow only modestly in the fourth quarter of 2001 from the levels of the third quarter.
In the current quarter, the company said it again expects to achieve record unit volume sales of Athlon and Duron processors, with revenues ranging from the level of the third quarter of 2001 to as much as 10% growth sequentially.
If current conditions prevail and as revenues from the company's other IC products and foundry services decline, the company expects that overall revenues will range from flat to high single-digit percentage growth in the fourth quarter.
Revenues in this range would be insufficient to offset the current level of expenses, and therefore the company currently expects to report an operating loss in the fourth quarter. |
