By Noel Randewich
Jan 22 Advanced Micro Devices' quarterly
revenue forecast on Tuesday did not meet expectations, and the
chipmaker's CEO warned of more choppiness in the PC market as
smartphones and tablets gain traction with consumers.
Still, AMD shares rose 1.2 percent in extended trading after
the company's fourth-quarter results beat expectations.
Like larger rival Intel, AMD is trying to refocus
its business as sales of laptops languish and consumers use more
While the Sunnyvale, California, company's results for the
quarter ended in December topped expectations, its revenue
forecast for the March quarter was gloomier than Intel's outlook
"As I look at the PC market, that market's going to continue
to be choppy in 2013," Chief Executive Rory Read told analysts
on a conference call.
"If I look at the overall year - weaker in the first half,
stronger in the second half. Probably a net flat to slightly
down," he said.
AMD estimated revenue in the current first quarter would
fall 9 percent from the fourth quarter, plus or minus 3
Last Thursday, Intel said revenue for its March quarter
would fall about 6 percent from the prior quarter and
disappointed Wall Street with a sharp increase in capital
"They (AMD) guided down 9 percent at midpoint, compared to
Intel down 6 percent. That really reflects a weaker competitive
position out there," said Evercore Partners analyst Patrick
Microsoft Corp's long-awaited launch of Windows 8
in October brought touch-screen features to laptops but failed
to spark a resurgence in sales that AMD, Intel and many PC
manufacturers had hoped for.
"We do think Windows 8 is a very important event in the
industry and we think that impact will build over the course of
the year," Read said.
On the conference call, Read focused on AMD's previously
announced plan to diversify into new markets and said that
measures to cut costs were on track.
AMD posted fourth-quarter revenue of $1.16 billion, compared
with $1.69 billion in the year-ago quarter. The mid-point of
AMD's revenue forecast for the March quarter is about $1.056
Analysts had expected $1.149 billion in revenue for the
December quarter and $1.108 billion in revenue for the current
quarter, according to Thomson Reuters I/B/E/S.
AMD and Intel were both caught flat-footed in recent years
with the emergence and fast growth of mobile devices, which led
to an unexpected slump in the PC industry.
While Intel has deep pockets to fund research on new
processors to catch up in tablets and smartphones, AMD faces
declining cash flows and a more modest balance sheet.
One of Silicon Valley's oldest chipmakers, AMD is trying to
find new markets for its chip technology, including
communications, microservers, digital signs and stripped down
"thin client" computers.
It recently hired two senior engineers with experience at
Qualcomm Inc and Apple Inc, its latest high-level recruitments,
as it looks for new business opportunities.
AMD had a net loss of $473 million, or 63 cents a share,
compared with a net loss of $177 million, or 24 cents a share,
in the same quarter the previous year.
Its adjusted loss per share was 14 cents, beating
expectations for a 20-cent loss.
Shares of AMD rose 1.22 percent in extended trade after
closing down 0.41 percent at $2.45.