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AMD Profit Down, Outlook Weak; Plans 7% Job Cuts(dpa-AFX International Compact Via Acquire Media NewsEdge) SUNNYVALE (dpa-AFX) - Advanced Micro Devices Inc. (AMD) Thursday said its third-quarter profit declined and also missed analysts estimates, even as revenues dropped. Moving ahead, the company detailed a weak sales outlook for the fourth quarter and announced plans to cut 7 percent of its workforce. Shares of the company fell about five percent in extended trading hours. AMD said it plans to cut its workforce by 7 percent as part of a restructuring plan under its new CEO Lisa Su to "better position the company for profitability and long-term growth." AMD had 10,149 employees at the end of the quarter, indicating that the job cuts will affect about 710 people. "While decisions that impact the size of our global team are never entered into lightly, this is the right step to ensure we prioritize our resources and engineering investments in our highest-priority opportunities that can drive improved profitability and long-term growth," said Su. Lisa Su had replaced Rory Read as AMD's CEO last week. AMD expects the strategic initiatives to result in a restructuring and impairment charge of about $57 million in the fourth quarter and a charge of about $13 million in first-half of 2015. The lay offs are expected to be completed by the end of the fourth quarter, and will result in savings of about $8 million in the fourth quarter and about $85 million by next year. AMD, known for its processors for personal computers, have been negatively impacted by the slowing demand for PCs and notebooks as tablets and smartphones gained prominence. The company is also losing market share to its larger rival Intel Corp. (INTC). However, the company has diversified its portfolio and currently make chips for video game consoles in addition to PCs. The company manufactures semi-customer SOCs for Microsoft's Xbox One and Sony's PlayStation 4, which have been a hit. The company said its Enterprise, Embedded and Semi-Custom segment results were strong, however, performance in Computing and Graphics segment was mixed due to challenging market conditions. Sunnyvale, California-based AMD's third-quarter profit dropped to $17 million or $0.02 per share from $48 million or $0.06 per share last year. Adjusted earnings for the quarter were $0.03 per share compared to $0.04 per share a year ago. On average, 25 analysts polled by Thomson Reuters estimated earnings of $0.04 per share for the quarter. Analysts' estimates typically exclude special items. AMD's revenues for the third-quarter slid 2 percent to $1.43 billion from $1.46 billion last year. Twenty-five analysts had a consensus revenue estimate of $1.47 billion for the quarter. Looking forward to the fourth quarter, AMD currently expects revenue to decrease 13 percent, plus or minus 3 percent, sequentially, indicating revenues of $1.29 billion to $1.20 billion. Analysts currently estimate earnings of $1.48 billion for the quarter. AMD closed Thursday's trading at $2.64, up $0.03 pr 1.15%, on the NYSE. The stock, however, slipped $0.12 or 4.55%, in the after-hours trade. Copyright RTT News/dpa-AFX |