Advanced Micro swings to a loss
 

Last Update: 5:38 PM ET Apr 13, 2005

SAN FRANCISCO (MarketWatch) - Advanced Micro Devices said late Wednesday it swung to a first-quarter loss due to deteriorating prices for its flash memory chips. The firm also said it plans to spin off the struggling flash unit in an initial public offering.

The Sunnyvale, Calif.-based firm reported a loss of $17 million, or 4 cents a share, compared to a profit of $45 million, or 12 cents, a year earlier. The results were well below Wall Street's forecast for profit of 2 cents a share.

Sales at AMD, the second-largest maker of chips used in personal computers after Intel Corp., dipped 1 percent to $1.23 billion, in line with analyst estimates.

AMD (AMD) has been hurt by falling prices for its flash memory chips used in cell phones and DVD players. Sales of those chips slid 29 percent to $449 million. The unit reported an operating loss of $110 million.

The performance of the flash unit "looks ugly to me," said Eric Ross, an analyst at ThinkEquity Partners, a San Francisco investment bank.

Those results have offset gains in sales of it chips used in PC's and computer servers. In the first-quarter, AMD's sales of computer chips rose 31 percent to $750 million, helped by sales of servers and laptops. The unit had an operating profit of $92 million.

AMD said in a release it intends to spin off the flash memory unit, called Spansion, in an initial public offering. The venture is 60% owned by AMD and 40% owned by Fujitsu. The number of shares to be sold in the IPO and the estimated price range has not been determined.

The flash business accounts for about 43 percent of the company's total revenue. The unit has racked up a net loss of $149 million during the last two quarters. Oversupply and stepped up competition from Intel (INTC) has led to losses in AMD's flash memory unit for the second straight quarter.

That performance has raised speculation among investors that AMD might jettison the business to focus on sales of computer chips.

http://custom.marketwatch.com/custom...tion=&symb=AMD

They don't make money, do they? :)
http://www.madshrimps.be/forums/show...threadid=14181