Advanced Micro Devices today reported sales of $686.43 million and a net loss of $854.74 million, or $2.49 per share, for the quarter ended December 29, 2002. Great losses are conditioned mainly by the effects of restructuring and other charges that have been being performed since November last year.

The fourth quarter sales declined by 28% from the fourth quarter of 2001 and increased by 35% from the third quarter of 2002. In the fourth quarter of 2001, AMD reported sales of $951.873 million compared to $686.43 million in the Q4 2002. According to AMD, the company experienced record consumption of their PC processors in the fourth quarter last year. Since the company made tremendous efforts in order to sell as much CPUs as possible and to finally align the processor inventory in the channel, there is no surprise that they really succeeded in selling a lot of products. The Sunnyvale, California-based semiconductor maker said that PC processor sales achieved $420 million for the quarter increased by 60% from the $262 million reported in the third quarter of 2002. This increase was driven by an increase in both processor units and ASPs.

Excluding the effects of restructuring and certain one-time charges, the fourth quarter 2002 net loss would be $217.37 million, down approximately $36.8 million or 14.5%, from the third quarter net loss of of $254.171 million or $0.74 per share, but still times more than net loss for the fourth quarter 2001, $15.842 million or $0.05 per share.

For the full year ended December 29, 2002, sales declined by 31% from 2001. AMD reported sales of $2.697 029 billion and a net loss of $1.303 012 billion, or $3.81 per share. AMD reported sales in 2001 of $3.891 754 billion and a net loss of $60.581 million or $0.18 per share.

In the fourth quarter of 2002 the company recorded one-time charges totalling $620 million, equivalent to $1.81 per share. These fourth quarter charges included:

• Restructuring and other special charges of $331 million primarily relating to severance for staff reductions, the consolidation of facilities and asset impairments.
• Other charges of $46 million primarily relating to a one-time research and development expense in connection with product development services received in the fourth quarter.
• Income tax expense charge of $243 million to establish a 100% valuation allowance against net deferred tax assets.

Despite of the fact that the company says that they are going well, it is clear that Intel pushes very rival hard now. The tough times are not over for AMD and it will not become easier for the Sunnyvale, California-based CPU manufacturer to compete with Intel this year. The latter constantly introduces new microprocessors and strengthens their specifications in order to boost the demand. AMD not always can answer with their new products and that is why their market share slumped in 2002. Although this year AMD has their x86-64 CPUs among the advantages, it is unlikely that the situation will improve much during the first half of the year. There will be too few advanced Hammer microprocessors in order to drive the company’s marker share back, however, these chips will definitely gain consumer’s interest towards AMD and overall situation may improve. On the other hand, do not forget about Intel’s Pentium 4 processors with 800MHz Quad Pumped Bus and the Hyper-Threading technology support.