AMD Posts $254.2 Million Third-Quarter Loss

For the three months ended Sept. 29, the company lost $254.2 million, or 74 cents per share, compared with a loss of $187 million, or 54 cents per share, in the same period a year ago.

Sales were down 34 percent, to $508.2 million from $765.9 million in the third quarter of last year.

Analysts were expecting a third-quarter loss of 67 cents per share on sales of $499.7 million, according to a survey of analysts by Thomson First Call.

Earlier this month, the company warned that it would fall about $100 million short of its previous revenue estimate of $600 million, which was provided with its second-quarter results in July.

At the time of the warning, AMD said it anticipated a "substantial operating loss" without giving specific numbers.

Contrary to analyst predictions, AMD did not announce any job cuts with its third-quarter results. Robert J. Rivet, AMD's chief financial officer, said actions to accelerate the return to black ink will be announced during the current quarter.

"We will begin to implement additional and aggressive actions in the fourth quarter that are expected to significantly reduce our quarterly break-even point beginning in the first quarter of 2003," he said.

The company blamed its loss on the continuing weakness in the personal computer market.

AMD, which competes with the much larger Intel Corp., builds microprocessors, the "brains" of PCs, as well as other integrated circuit devices such as flash memory for cell phones.

Intel's earnings, which were released Tuesday, also missed analyst expectations. Still, Intel has continued to post profits and can afford to spend large amounts of money on development and continue to undercut AMD on price.

To make matters worse, AMD's Athlon XP processors have not been able to keep up in the speed race with Intel's Pentium 4 chips.

Earlier this month, AMD announced its fastest chip to date, the Athon XP 2800 , which runs at 2.25 Gigahertz. The chip, however, won't be available until late November at the earliest.

Intel's top-of-the-line Pentium 4 now tops out at 2.8 GHz. A 3.06 GHz Pentium is due to be released before the end of the year.

AMD also has delayed its next-generation desktop processors, which are code-named Clawhammer. They were originally scheduled for release by the end of the year. Now, they are expected in early 2003.

AMD currently employs 13,000 people. In September 2001, it cut 2,300 jobs, or 15 percent of its work force, and closed two factories in Texas.

Shares of AMD lost 71 cents, or nearly 17 percent, to close at $3.49 in Wednesday trading on the New York Stock Exchange. In extended-session trading, they gained 26 cents.

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