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AMD Posts $140 Million Loss In Second Quarter

But the chipmaker beat its diminished expectations and said third-quarter sales should increase.
SAN JOSE, Calif. (AP) -- Chipmaker Advanced Micro Devices Inc. on Wednesday posted a $140 million loss in the second quarter, but still beat Wall Street's lowered expectations.

For the three months ended June 29, the Sunnyvale, Calif.-based company lost 40 cents per share, compared with a loss of $185 million, or 54 cents, per share for the same period last year. Second-quarter sales grew 7 percent, to $645 million from $600 million in 2002.

Analysts were expecting AMD to lose 54 cents per share on revenues of $614 million, according to a survey by Thomson First Call.

Last month, AMD warned its revenue would be about $615 million, down $100 million from its original estimate of $715 million.

The company said sales in the third quarter were expected to increase, based on historical patterns, flash memory sales projections and other factors. AMD did not provide a specific number for its sales forecast.

In the second quarter, sales of personal computer microprocessors were $402 million, up 7 percent from the same period in 2002. Sales were off significantly in Asian and European markets, AMD said.

AMD reported memory chip sales of $211 million, down from the $218 million in the first quarter but up 20 percent over 2002. The company said a decline in demand caused by the SARS epidemic in Asia was offset by increased sales in North America and Europe.

AMD has been struggling in recent quarters to keep pace with larger rival Intel Corp., which on Tuesday reported that its second-quarter profits had doubled from a year ago.

Aside from a lackluster economic climate, AMD has faced delays in the launch of its next-generation desktop microprocessors, the Athlon 64. It's expected to be released in September.

In April, AMD launched its Opteron processors, which can handle data in 64-bit chunks, twice the size of today's standard 32-bit processors. It's targeted at workstations and servers.

Robert Rivet, AMD's chief financial officer, said Opteron is gaining traction in the marketplace, and systems built on the chip will soon be offered by International Business Machines Corp., Fujitsu Siemens, and others.

For the first half of the year, AMD lost $286.5 million, or 83 cents a share, versus a loss of $194.1 million, or 57 cents a share, a year ago. Revenue fell to $1.36 billion from $1.50 billion.