Advanced Micro Devices Loss Narrows but Shares Fall

Advanced Micro Devices Inc. (AMD) said its second-quarter loss narrowed on improved revenue and lower costs.

However, shares fell 15% to $3.84 in recent after-hours trading, shortly after the financial results were released, as adjusted earnings missed expectations.

For the current quarter, the company forecast revenue growth of 2% from the period ended in March, plus or minus 3%. Analysts polled by Thomson Reuters expected revenue of $1.57 billion.

AMD has been trying to restructure its operations to diversify its products and adapt to progressively weak demand for personal computers, which also has weighed on its peers. Last month the company said it would would consolidate its disparate business groups into two segments, with new operating chief Lisa Su overseeing the integration.

Advanced Micro Devices reported a loss of $36 million, or five cents a share, compared with a year-earlier loss of $74 million, or 10 cents a share, a year earlier. Excluding debt-redemption losses and other items, adjusted earnings were two cents, compared with a year-earlier loss of nine cents. Revenue increased 24% to $1.44 billion.

Analysts polled by Thomson Reuters expected per-share profit of three cents and revenue of $1.44 billion.

Gross margin fell to 35% from 40%.

Overhead costs declined 9.9% and research-and-development expenses fell 10%.

Computing segment revenue fell 20% mostly on decreased microprocessor unit shipments.

Graphics and visual solutions segment revenue more than doubled, driven mostly by increased semi-custom chip shipments.

Write to Tess Stynes at [e-mail]

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