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Technology Stocks : AMD:News, Press Releases and Information Only! -- Ignore unavailable to you. Want to Upgrade?

To: Joey Smith who wrote (3757)	1/13/1998 7:01:00 PM
From: Yougang Xiao	Respond to of 6843

Spin by WSJ's Interactive Edition: Advanced Micro Devices Posts Narrower-Than-Expected Loss An INTERACTIVE JOURNAL News Roundup Advanced Micro Devices Inc. reported a narrower-than-expected loss in the fourth quarter, due mostly to increased sales of its K6 microprocessor in the period. The Sunnyvale, Calif., company reported a net loss of $12.3 million for the three-month period ended Dec. 28, or 41.9% narrower than a loss of $21.2 million a year earlier. Revenue, meanwhile, climbed 23% to $613.2 million from $496.9 million in the year-earlier quarter. Under new accounting standards that went into effect late last year, companies must report per-share earnings in two redefined ways, diluted and basic. The diluted per-share loss, or net divided by common shares outstanding plus potential common shares from securities such as options and convertible securities, was 9 cents, narrowing 40% from 15 cents. Basic per-share earnings, or net divided by shares outstanding, were identical. Analysts surveyed by First Call had expected a net loss of 14 cents a share. The chip maker said that shipments of the K6 processor rose 50% in the period, and that its sales rose 26% in the quarter, accounting for the better-than-expected results. AMD also said that its non-microprocessor businesses, including flash-memory chips, performed significantly better. "Our three non-microprocessor businesses -- our Communications Group, our Memory Group, and our programmable logic company, Vantis -- were profitable in the aggregate in the fourth quarter on revenues down slightly from the immediate-prior quarter," W.J. Sanders III, chairman and chief executive officer, said in a statement. "We were especially pleased that flash-memory sales increased nominally during a period of intense competition." But Mr. Sanders said that there is still room for improvement as AMD moves to adopt newer and faster chip technology. "Although we increased unit production substantially, yields continued to be disappointing," AMD said. "We achieved significant progress in shipping higher-speed devices as nearly half of the units shipped were 233-megahertz devices." Although AMD, which has stumbled in its attempts to compete with chip giant Intel Corp., announced a fourth-quarter loss, analysts were more interested in how many K6 chips AMD expects to manufacture this year. The K6 is seen as a credible rival to Intel's Pentium II chip and has generated a lot of interest, but in recent months AMD has twice reduced its production forecast. William Milton, an analyst at Brown Brothers Harriman & Co., said he's going to be listening to AMD officials for indications of how many K6 chips AMD expects to manufacture in 1998. Analysts who have been bullish on AMD have said all along that the key to denting Intel's 80%-plus market share would be swiftly boosting K6 production. But the execution hasn't been good. Compaq Computer Corp., the world's top supplier of personal computers, last week rolled out a $799 model that uses a 200-megahertz K6 chip. In fact, all of Compaq's new systems unveiled last week and priced below $1,300 are powered by K6 chips. And International Business Machines Corp. last week unveiled a line of Aptiva PCs powered by 266-Mhz and 233-Mhz K6 chips. AMD sells K6 for about 25% less than comparable chips from Intel, but David Wu, an analyst with ABN AMRO, said that in order to secure the Compaq deal, AMD probably had to offer a major discount. Still, Sanford Bernstein analyst Vadim Zlotnikov said the agreement will help AMD despite possibly low profit margins. "The benefits to AMD are credibility and high volume," Mr. Zlotnikov said last week. Although it has been disappointed by the smaller-than-expected K6 production yields from a factory in Austin, Texas, AMD has to be happy by the willingness of top computer companies to use the chip. Digital Equipment Corp., Taiwan's Acer Group and Japan's Fujitsu Ltd. are also using the K6 in some models. Advanced Micro Devices was unavailable for after-hours trading. In New York Stock Exchange trading Tuesday, shares of AMD rose $2.875 to $20.625. The results were released after the close of trading.