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Details emerged Friday about how much Advanced Micro Devices Inc. overpaid for graphic chipset maker ATI Technologies Inc. Back in December, the processor maker warned that it would take a material writedown of the goodwill associated with the $5.4 billion acquisition. When it announced fourth-quarter earnings Thursday afternoon, it revealed the size of the charge: $1.68 billion.
That's a big chunk of change, but Wall Street seems to be looking at the bright side of AMD's results. Its loss for the quarter was $1.77 billion, or $3.06 per share, about triple the loss of the year-ago period. But excluding the goodwill charge, the loss amounted to around 17 cents per share.
Analysts had expected that figure to be around 32 cents. Shares of AMD were up 10.4%, to $7, in early afternoon trading Friday. That said, life isn't necessarily going to get easier for AMD, with its much-larger arch-rival Intel Corp. constantly looming. AMD said that it aims to return to operational profitability by the third quarter, but that generated some skepticism among analysts. Merrill Lynch's Srini Pajjuri called it "an aggressive goal."
"AMD's target implies continued share gains and margin expansion at the same time, which we view as unrealistic," Pajjuri wrote. -- Olaf de Senerpont Domis
See December 2007 post from Money Out
See Jan. 17 article from The Motley Fool
For more see Tech Trader Daily and BloggingStocks
