SUNNYVALE, Calif.--During a conference with financial analysts today, Advanced Micro Devices Inc. here said current market conditions--especially weakness in flash memories--will delay AMD's return to profitability until the second quarter of 2002.
The Sunnyvale company also reaffirmed its outlook for the fourth quarter, predicting revenues would be sequentially flat to slightly higher on record shipments of PC processors.
"Seasonal patterns in the PC industry lead us to believe that AMD PC processor revenues in the first quarter of 2002 could retreat somewhat from the current quarter," W.J. (Jerry) Sanders, chairman and CEO of AMD. "The outlook for flash memory going into 2002 remains uncertain, and pricing pressures on flash memory products are expected to remain intense.
"We currently expect that these conditions will delay our return to profitability until the second quarter of 2002," he warned.
Sanders said AMD's cost containment and cost reduction program will contribute to improved operating results in Q2 next year and beyond. "While we expect only very modest overall growth in the semiconductor industry next year, we believe that our new product offerings and low manufacturing costs will result in a profitable year overall for AMD in 2002," Sanders said.
In the third quarter, AMD sales sequentially declined 22% to $765.9 million, resulting in net loss of $187 million, including charges. The company said its outlook remains unchanged for Q4 with revenues expected to be flat-to-slightly higher than Q3 (meaning maximum growth in the "high single-digit" percentage range).
