NEW YORK (CNN/Money) -
Advanced Micro Devices, the No. 2 supplier of microprocessors used in personal computers, said Wednesday that it lost more money than Wall Street expected in the second quarter, a period when the company cut financial guidance twice.
A continued slowdown in the computer business hurt AMD (AMD: Research, Estimates), which said it lost $184.9 million, or 54 cents per diluted share, in the three months ended in June. That follows a year-ago profit of $17.3 million, or 5 cents per diluted share.
Analysts expected the company, which makes Athlon and Duron processors, to lose 45 cents a share, according to First Call, on revenue of $600 million.
Declining 39 percent, AMD's sales matched forecasts.
Ahead of the results, which came after the markets closed, the company's shares slipped 7 cents to $9.33, widening their year-to-date loss to 41 percent. That performance is only slightly worse than AMD rival Intel, whose shares are down 38 percent in 2002.
Blaming sluggish computer sales, Robert J. Rivet, AMD's chief financial officer, also alluded to Intel by linking the weak quarter to "a highly competitive market."
"The magnitude of the market weakness was greater than expected," Rivet said in a conference call with investors. "Unfortunately, PC demand in the second quarter did not materialize as expected."
PC processor sales fell 35 percent to $380 million for the quarter. Still, Rivet said strength in the high-end mobile phone markets helped sales of flash memory chips, which rose by an unspecified amount.
Rivet said the company, which has more than $1 billion in cash, has been reducing inventories and cutting costs. It has 13,700 employees, down from 15,000 a year ago.
AMD's results come a day after Intel, the No 1 chipmaker, announced plans to cut 4,000 jobs, or nearly 5 percent of its work force. Intel Tuesday also posted second-quarter earnings that fell short of Wall Street forecasts.
The June quarter was a tough one for AMD (AMD: Research, Estimates). Sunnyvale, Calif.-based AMD on June 18 and July 3 warned that sales would fall short.
The entire industry is sluggish. Just Tuesday, Apple Computer (APPL: Research, Estimates) lowered its September-quarter sales and profit guidance.
Looking ahead, AMD said it expects third-quarter sales of PC processors to show a sequential increase from second-quarter levels. That's in line with seasonal patterns. But the company stopped short of saying when it would return to profitability.
"We will receive modest sequential growth in revenue," Hector De Ruiz, the company's CEO, said in the conference call.
Despite its smaller size, AMD had been pecking away at Intel's market share with its Athlon line of processors. In response to the growing competitive threat, Intel has stepped up production of its Pentium 4 chips and has been aggressively cutting prices, forcing AMD to respond in kind.
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