AMD loses $574 million in Q4

Posted by Wolfgang Gruener

Sunnyvale (CA) - The purchase of ATI has brought AMD record revenues of $1.77 billion in the fourth quarter of last year, but acquisition charges also resulted in a dramatic loss of $574 million. Excluding ATI, AMD saw flat year-over-year revenues of $1.37 billion with a slight profit of $63 million - a 77% decline over the $272 million, the company earned in Q4 2005.

For the complete year, AMD revenue increased 33% to $5.25 billion and operating income increased 9% to $600 million for the year ended December 31, 2006, excluding the former ATI operations, acquisition-related and integration charges, and employee stock-based compensation expense. This compares with revenue of $3.94 billion and operating income of $548 million for the year ended December 25, 2005. Including all charges, AMD posted a net loss of $166 million for 2006.

AMD claims that it has gained market in the microprocessor market during the quarter, but flat revenues year-over-year and sequentially suggest that the company has digest the impact of the ongoing price war with Intel. According to AMD, fourth quarter microprocessor unit shipments grew 26% year-over-year and 19%.

Fourth quarter demand for AMD mobile processors was described to have been "especially strong, resulting in record unit shipments and revenue." The firm said that mobile processor unit shipments and revenue both increased 41% quarter-over-quarter. Year-over-year, mobile processor unit shipments increased 76% and revenue increased 8%.

While AMD said that its X2 desktop processor had a strong quarter, Opteron shipments and sales appear to have been impacted by the competitive pressure of Intel's Woodcrest and Clovertown processors: Shipments remained "flat compared to the third quarter," AMD said and average selling prices "were down significantly."

AMD's stock was losing 0.06% in after hour trading activity on Tuesday.