* Adjusted EPS 12 cents, vs 9 cents Street view
* Sees current quarter revs up 3 percent
* Stock up after hours
* Other chipmakers post mixed results
By Noel Randewich
SAN FRANCISCO, April 19 Chipmaker Advanced Micro
Devices forecast revenue above expectations in another
sign that PC demand is holding up better than anticipated.
Shaky economies in Europe and the unsteady recovery in the
United States, a growing consumer preference for tablets, and a
recent shortage of hard drives due to flooding in Thailand last
year have taken a toll on the PC industry.
"There was a decent Q1 number and decent Q2 guidance, and
that's indicative of a rebound in PC builds as hard drives
become more available," said MKM Partners analyst Daniel
Better-than-expected results from Microsoft on
Thursday supported that view, sending the software maker's
shares up 2.5 percent after hours.
Other chipmakers offered mixed results, with some pointing
to a recovery in sales after customers, worried about the
economy, trimmed inventories last year.
AMD faces stiff competition as Intel starts
shipping its newest powerful PC chip, code-named Ivy Bridge, and
builds sales of its recently launched Romley server platform.
Sunnyvale, California-based AMD has been launching new
processors of its own, and recently appointed CEO Rory Read has
vowed to improve on long-standing execution troubles.
On Tuesday, Intel posted earnings confirming the PC industry
is alive, but not kicking, in a report that failed to fuel new
stock gains after a recent run-up.
Global PC shipments in the first quarter grew 1.9 percent,
year-over-year, research firm Gartner said last week. That was
better than the firm's previous forecast of a 1.2 percent dip in
PC shipments, which were hurt last year after flooding in
Thailand damaged hard drive factories.
"The hard (drive) situation has pretty much gotten past
everybody in the industry ... with the only issue being some
residual higher pricing that's floating around in the market,"
AMD CEO Read told analysts on a conference call.
MIXED CHIP SIGNALS
Fairchild Semiconductor and Cypress Semiconductor
Corp each forecast quarterly revenue above analysts'
expectations as customers clear out chip inventories and place
Freescale Semiconductor Holdings I Ltd, whose chips
are used in cars, cellphones and consumer products like
Amazon.com Inc's Kindle electronic reader, posted
first-quarter revenue of $950 million, shy of the $961 million
expected. It said Chief Executive Rich Beyer planned to retire
once a successor is found and takes over.
Flash memory chipmaker SanDisk, hurt by falling
prices for its products, posted first-quarter revenue that was
also short of already lowered estimates. And
programmable chipmaker Altera also posted weak results
that fell short of analysts' estimates.
Following major layoffs last year and a new, more flexible
wafer agreement with contract manufacturer GlobalFoundries,
AMD's stock has surged 44 percent so far this year, much more
than Intel's 14 percent rise and the S&P 500's increase of about
In March, AMD dumped its equity stake in GlobalFoundries,
three years after spinning off the company that makes most of
its computer chips, in a move that frees it to strike
manufacturing deals with other foundries.
As part of the deal, AMD agreed to make a payment of $425
million to GlobalFoundries, incurring a related charge of $703
million that pushed AMD into a loss for the first quarter.
Also in March, AMD finalized its $334 million acquisition of
SeaMicro Inc, a deal - applauded by investors - meant to
establish a foothold in smaller, low-power computer servers, a
potential area of growth as Internet services expand and
corporations look to save on electricity bills.
AMD posted first-quarter revenue of $1.59 billion, down from
$1.61 billion in the year-ago period. It estimated
second-quarter revenue would rise 3 percent from the previous
quarter, plus or minus 3 percentage points.
Analysts had expected AMD to post $1.56 billion in revenue
for the first quarter and $1.59 billion for the current quarter,
a sequential rise of 2 percent, according to Thomson Reuters
AMD had a net loss of $590 million, or 80 cents a share,
compared to a net profit of $510 million, or 68 cents a share,
in the year-ago period. Adjusted earnings were 12 cents per
share, beating expectations of 9 cents.
Shares of AMD rose 1.63 percent in extended trade after
closing flat at $7.97.