AMD Narrows Loss, Beats Expectations

Continuing to wade through red ink, semiconductor manufacturer Advanced Micro Devices Inc. posted a second- quarter loss of $140 million on Wednesday, citing slow sales of personal computers and mobile phones in Asia and Europe.

The loss, which amounted to 40 cents a share, was nonetheless better than the consensus of analysts polled by Thomson First Call, who had expected a loss of 54 cents. In the same period last year, AMD lost $185 million, or 54 cents a share.

Revenue for the quarter rose to $645 million, up nearly 8%, from $600 million last year.

The quarterly loss was the eighth straight for the Sunnyvale, Calif.-based chip maker, which is perennially in the shadow of industry giant Intel Corp. and its 80% share of the global semiconductor market.

But Chief Financial Officer Robert J. Rivet emphasized that AMD reduced its net loss by 24%, a feat that impressed analysts.

“They’ve squeezed down operating costs,” said John Lau, a semiconductor analyst with investment bank RBC Capital Markets.

AMD shares gained 4 cents to close at $7.32 in regular trading Wednesday on the New York Stock Exchange, then rose as high as $7.60 after hours.

Rivet said AMD’s new 64-bit Opteron chip for server computers was “gaining traction” and would appear soon in servers from IBM Corp., Fujitsu, Siemens and others. The chips can process data twice as fast as the more common 32-bit processors. AMD’s Athlon 64 processor, for 64-bit computing with desktop computers, is on track for a September launch, he said.

Still, analyst Lau said, he did not expect AMD to turn a profit until the end of 2004.

“It will have to turn on the catalyst of Opteron and Athlon 64 to regain market share and break even,” he said. “It’s a long road.”