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AMD slips back into red during Q4 on memory weakness

AMD slips back into red during Q4 on memory weakness

Advanced Micro Devices (AMD) saw its short streak of quarterly profits come to an end, as sales growth slowed in the fourth quarter due to competitive pricing for its flash memory products, the company said Tuesday.

For the fourth quarter, AMD recorded revenue of US$1.26 billion, up 5 percent from the US$1.2 billion in revenue recorded during last year's fourth quarter. This was slightly ahead of analyst expectations of US$1.25 billion, as compiled by Thomson First Call, but those expectations were based on a warning from AMD issued earlier this month that said the flash memory group would lose money.

Flash memory makes up almost half of AMD's total revenue, and revenue from flash memory sales decreased by US$62 million from 2003's fourth quarter to the most recent fourth quarter, the company said Tuesday in a press release. It blamed strong price competition and a product delay for the decrease.

As a result, the memory group was unprofitable for the quarter, with an operating loss of US$39 million. When that loss was combined with a US$49 million charge due to the retirement of debt, AMD recorded a net loss of US$30 million for the quarter. In the fourth quarter of 2003, AMD recorded US$43 million in net income, the company's first profit in nine quarters.

On the bright side, revenue from AMD's primary microprocessor business increased by 26 percent compared to last year, as the company continued to grow based on demand for its Opteron and Athlon 64 processors.

For the full year, AMD's revenue was US$5 billion, a company record. Net income was US$91 million for the full year. Both figures represent a significant improvement over 2003, when AMD recorded US$3.52 billion in sales and a net loss of US$274 million.


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