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AMD makes less of a loss

A couple of days after Intel claimed to have achieved its best financial quarter ever, rival chip maker AMD managed to make less of a loss than many observers were expecting.

Indeed, the outfit might have made a profit were it not paying for fabs it no longer owns, having 'spun off' its manufacturing business to GlobalFoundries in 2009.

AMD posted a net loss of $43 million, or six cents per share for the quarter ended June 26. Revenue was pegged at $1.65 billion, an increase of 40 per cent over last year. The firm's gross margin rose to 45 per cent of revenue, from 37 per cent last year. Intel's, in comparison, is currently 67 per cent.

The firm posted a $120 million non-cash loss related to GlobalFoundries, an outfit it retains around a 20 per cent interest in.

AMD said its performance was "solid" and reported that demand for its "GPU offerings were very strong".

President and CEO Dirk Meyer said, "Robust demand for our latest mobile platforms and solid execution drove record second quarter revenue and a healthy gross margin."

He claimed AMD's "unmatched combination of microprocessor and graphics capabilities resulted in customers launching a record number of new mobile and desktop platforms. We added Sony as a microprocessor customer and continue to see our existing customers expand their AMD-based platform offerings."

Highlights for AMD's quarter include the fact that it sold some notebook chips. The segment made a $128 million profit compared with a loss of $67 million in Q2-09.

ATI's contribution was up eight per cent sequentially and 87 percent year-over-year. The increase was driven by record GPU unit shipments, although average selling prices for these were down.The firm said it had shipped more than 16 million Microsoft DirectX 11-capable GPUs in the three quarters since it began selling them.

The graphics unit made a $33 million profit, compared with $47 million in Q1-10 and a loss of $17 million in Q2-09.

The company said expects third-quarter revenue to rise with the seasonal swing. It shied away from predicting a profit.

Its stock price rose 4.7 per cent, or 35 cents, to $7.76 in extended trading.