AMD HAS ANNOUNCED a massive reduction in third quarter loss, down about six times what the company lost in last year’s third quarter, thanks to a higher than usual income from technology licensing fees, fewer charges and higher margins.
The Chip maker surprised analysts, who expected the firm to lose 40 cents a share in Q3, by only reporting a loss of $67 million, or 11 cents a share. Compared to last year’s third quarter loss of $396 million (71 cents per share), these recent results are almost cause for celebration at the firm, which has suffered eight consecutive quarterly losses.
AMD managed to reach its operational profitability goals for the quarter and even increased gross margins by from 41 to 51 per cent.
The fact that AMD’s latest upgrade to the ATI graphics processor line proved so successful did no harm either and was particularly helpful in driving revenues up 40 per cent from the same period last year.
Another crucial factor was a 14 per cent rise in revenues from last year, reaching $1.78 billion this quarter. $191 million of that came from technology licensing revenue mainly from flogging older manufacturing equipment to a Russian firm.
Also, not counting losses from discontinued operations, or money spent on restructuring and acquisitions ($39 million), AMD reckoned it earned $80 million, or roughly 13 cents per share.
Trying to claw itself back to black, AMD recently confirmed it was spinning off its manufacturing division to go “asset smart”, cutting AMD’s workforce by 3,000 people, slashing capital expenditures and focusing more on chip design. The spin-off, dubbed The Foundry Co. has been heavily invested in by the Abu Dhabi government which now owns more than half of it.
Looking toward the current fourth quarter, AMD reckoned its revenues would stay around the $1.6 billion mark, which is more or less flat with third quarter revenue, not counting any license cash.
AMD shares soared by 73 cents in extended trading, a 19 per cent boost to $4.59. µ
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