Considering the devastating two years Advanced Micro Devices Inc. has endured, investors braced themselves for more bad news in the fourth quarter after rival Intel Corp. disappointed Wall Street with lackluster results.
The slowdown they feared didn’t materialize.
Instead, Sunnyvale-based AMD managed to post a much narrower loss than analysts expected, jolting its stock on signs that AMD is driving down costs and protecting its share of the microprocessor market from an Intel onslaught.
“Obviously, they turned in a truly excellent quarter,” said JoAnne Feeney, senior research analyst with FTN Midwest Securities Corp. “They’ve continued the progress they began making a couple of quarters ago. It should assuage the fears of a lot of investors about the company’s ability to execute.”
Still bleeding from the costly acquisition of a graphics chip company, AMD absorbed heavy charges connected to the deal in the fourth quarter that dragged down its results.
However, AMD executives stoked shareholder optimism by reiterating their pledge to return the company to profitability by the second half of this year. In addition, they said the flaws plaguing AMD’s new line of server chips have been fixed and samples will ship to customers in two to three weeks.
AMD’s new Opteron server chip, critical to its financial recovery, launched in September. But technical glitches delayed a full release.
In after-hours trading, AMD shares rose 26 cents, or more than 4 percent, to $6.60. During the regular session, before the results were released, AMD shares closed down 23 cents at $6.34.
AMD’s losses in 2007 were staggering, capping a brutal two-year stretch in which the company’s market value has plunged from more than $20 billion to $3.5 billion today. The stock has fallen from over $40 a share in early 2006 to nearly $5 in recent weeks.
For the full year, AMD lost $3.38 billion, $2 billion of which…