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AMD gains altitude in Q4 but hit by ATI scud missle

Still expects profits in Q3 '08

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AMD says its chugging ever-closer to profitability. Perhaps it's right. The chip fabbing second-banana's losses shrunk in the fourth quarter of '07 — well, sort of.

The company said it achieved a "near break-even performance" in the traditionally strong Q4 sales season. A feat that's true in the theoretical sense, but largely figure of fancy due to a $1.68bn write-down from its purchase of graphics chip maker ATI.

AMD's fourth quarter net loss in fact totaled $1.77bn. A solid tumble from being $576m in the red a year ago. However, if not for the one-time charges, AMD would have recorded a loss of $9m this quarter.

Revenue was flat with last year at $1.77bn. AMD's chip segment revenue was $1.4bn, an increase from $1.37bn year-over-year. Graphics and chipsets segment revenue was $259m, down from last year (as a former ATI operation) at $398m.

AMD said it's sticking with a plan laid down in December to fix a year's worth of financial losses, design gaffes, sagging market share, doom-calling analysts and costly chip distribution.

"Everything we told you at the analysts' meeting is on plan, and there is no change in any of the information we gave you," CEO Hector Ruiz said today in the quarterly conference call.

The company still expects to break-even in the second quarter of this year and to return an operating profit in the third. It said the design flaw haunting AMD's Opteron chips has been fixed, and plans to ship samples to customers in two to three weeks.

CFO Robert Rivet said today it shipped a record number of microprocessor units in Q4, including about 400,000 quad-core processors. Microprocessor shipments rose 7 per cent from the third quarter and server chips grew 22 per cent, due to its quad-core Opterons.

AMD followed a quarterly report on Tuesday from Intel, which suffered a bout of investor panic over the possibility of tech companies being hurt by slowing US economic growth. Despite reporting record fourth quarter revenue, Intel shares received a pummeling due to the company missing lofty analyst estimates. ®

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