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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Jim McMannis who wrote (31510)	4/8/1998 5:19:00 PM
From: Maverick	Respond to of 1583722

Advanced Micro reports Q1 loss, sees profits in Q3 By Therese Poletti SAN FRANCISCO, April 7 (Reuters) - Semiconductor maker Advanced Micro Devices Inc. reported a bigger-than-expected net loss in the first quarter, due it its manufacturing problems and its transition to a new process technology. But the company, which develops Intel-compatible processors and other chips, also said that its manufacturing problems are solved and that it could be profitable in the third quarter. Sunnyvale, Calif.-based AMD said it had a net loss of $55.8 million on sales, or 39 cents a share, on sales of $540.8 million for its first quarter, ended March 29. Revenues fell 12 percent from the fourth quarter revenues of $613 million and two percent from the year-ago quarterly revenues of $552 million. In the year ago quarter, AMD had a net profit of $12.9 million or nine cents a share, diluted. According to First Call, the consensus among analysts was a loss of 29 cents a share. Sanders said that during the quarter, market conditions in the worldwide semiconductor industry were unsettled, with excess capacity in memories, severe pricing pressures, and aggressive inventory reduction plans by customers, combined with weak demand in some parts of Asia. But Sanders also confirmed recent analyst speculation that the company has fixed its manufacturing woes, which had hurt its profits and hampered sales of its K6 Pentium clone chips. Sanders said that AMD's production of its K6 units were up modestly in its first quarter and that its yields, the parts that can be shipped to customers, were better than expected. "We believe we are now back on the steepest microprocessor ramp in our history," Sanders said, adding that he expects AMD to ship at least two million K6 units in the second quarter, versus over 1.5 million in the first. Sanders said that as a result of its manufacturing progress, AMD has a "good chance" of returning to profits in the third quarter. "Our goal is to return to profitability in the second half," Sanders said on a conference call with analysts. "Right now that is the third quarter...We have a good chance of returning to profitability in the third quarter. That would mean that revenues would have to be over $700 million." He said that the other parts of AMD's business, including its flash memory, communications and programmable logic, have been profitable. "The commentary relative to the better yields was widely anticipated," said Scott Randall, a SoundView Financial Group analyst. "The loss was greater than I had expected, but this was all about the outlook."

To: Jim McMannis who wrote (31510)	4/8/1998 5:19:00 PM
From: Maverick	Read Replies (1) \| Respond to of 1583722

Sanders also said that AMD plans to raise capital sometime in the second quarter, as analysts have been speculating to solve an upcoming cash crunch, but he declined to give any further details at this time. "We are definitely going to do a financing," he said. "We filed a shelf registration with the SEC. We will access the capital markets in the second quarter." He said AMD has not yet selected its investment bankers. AMD ended the quarter with about $307 million in cash. In the past week, Wall Street has been rife with rumors that AMD's manufacturing partner, International Business Machines Corp, would invest in a 25 percent stake in AMD. "The only relationship we have with IBM is a foundry relationship and as a customer," Sanders said. "Anything else is rumors. We don't comment on rumors -- good rumors or bad rumors." IBM has signed a pact to act as a second manufacturing source for AMD of its K6 chips. IBM also uses the K6 in its low-cost PCs and said it would use the new 300 megahertz version of the K6 in its Aptiva consumer line. AMD does not expect to see any meaningful revenues from the wafers produced by IBM until the fourth quarter.

To: Jim McMannis who wrote (31510)	4/12/1998 3:02:00 AM
From: Profits	Read Replies (1) \| Respond to of 1583722

Jim, re: "Profits, I just wanted to apologize for busting your chops a while back about you not being in business. I just wanted to find out what you really knew about AMDs yields. Didn't mean that I wasn't interested in AMD. Anyone in their right mind had to figure sooner or later they would get the yields up." Apology accepted. The yield news hit the analysts and the press 1 week earlier than I had posted. Nonetheless, the accuracy of my statements cannot be denied. 17 to 30 in less than 2 months. Not a bad run. The next run will occur when the K6-3D launches in June and the K6 shipments in Q2 are realized. The stock should easily break 40 at that time. Until then, the stock should stay in its current trading range $26 - $30, unless the 25% equity rumors are realized or $1B shelf offering hits the street. Profits