Soft PC sales put the pinch on semiconductor giant Advanced Micro Devices Inc (NYSE:AMD) and was reflected in the company’s fourth-quarter report that showed a loss.
Posting a wider than expected loss for the fourth-quarter, especially seeing as many analysts thought the company might post a meager profit, is evidence that the weak PC market is putting on related industries.
AMD Chief Executive Rory Read told analysts during a conference call that, “We expect continued choppiness in the PC market in the first half of 2013.” The company had predicted that revenue for the current quarter would decline as much as 9%, due in the short-term to moves the company is undertaking to restructure and ultimately cut costs.
Intel Corp (NASDAQ:INTC) is AMD’s chief competitor in the microprocessor market and who also sell graphics chips that are used in PC’s and gaming devices.
AMD’s results do have some positive elements though showing signs of a pricing rebound for microprocessor units since the third-quarter.
The company is coming off a 15% cut in their labor force as of mid-October that along with agreements with Globalfoundries Inc represent parts of the overall restructuring plan. Parts of those deals enable AMD to slow the purchase rate of processed semiconductor wafers when necessary and will save the company money over the term of the agreement.
Fourth-quarter period ending December 29, saw AMD take a net loss of USD $473 million, or $0.63 per a share. During the same period for the previous year, which showed a $209 million charge, causing AMD a net loss of $177 million, or $0.24 cents per share. Overall, revenue fell 32% to USD $1.16 billion.
Hard times are being felt by many industries working closely with the PC market, manufacturers and suppliers, so AMD is hardly alone in their financial woes.
Stock Price Performance: (30-Day) Between December 21, 2012 and January 22, 2013, Advanced Micro Devices Inc(NYSE:AMD) stock price decreased USD $0.14 (-5.40%) USD $2.59 to $2.45. Intel Corporation(NASDAQ:INTC) stock price increased USD $1.91 (+9.19%) USD $20.77 to $22.68.