Advanced Micro Devices Inc.'s first quarter net loss grew and revenue slid 21 percent although the company reported sales improved on a sequential basis with demand for its core microprocessor products rising from the preceding quarter.

The company reported net loss widened to $414 million, or 66 cents per share, in the three months ended March 28, from net loss of $351 million, or 55 cents a share, in the first quarter of 2008. Revenue fell on a year-over-year basis to $1.2 billion from $1.5 billion in the comparable 2008 quarter and grew slightly from $1.16 billion in the fourth quarter.

AMD said it expects sales in its product division¡ªthe core of the company following the spin-off of the foundry operation¡ªwill be flat sequentially in the current quarter and added visibility into demand remains limited. The results announced Tuesday (April 21) included figures from Global Froundries Inc., the unit spun off earlier this year by AMD.

"AMD's sequential microprocessor unit and revenue growth in difficult economic conditions demonstrate we can grow in an environment where customers are looking for maximum value," said Dirk Meyer, president and CEO of the Sunnyvale, Calif., company in a statement.

"We delivered on a number of important priorities in the first quarter. We launched Global Foundries, maintained our cadence of new product and platform introductions and made solid progress on our restructuring activities," Meyer added. "The result is a more nimble AMD, capable of achieving long-term success based on our strengths designing and integrating industry-leading computing and graphics technologies."

AMD said its gross margin improved to 43 percent in the first quarter, benefiting 5 percent age points from the sale of inventories previously written down by the company. Gross margin in the preceding quarter was 23 percent, impacted 20 percentage points by the effects of a $227 million inventory adjustment charge.

AMD's cash and short-term securities improved during the quarter to $2.7 billion from an adjusted amount of $1.1 billion in the December quarter. The figures included numbers from Global Foundries, AMD's manufacturing outfit.

The company's sales of computing solutions, or microprocessors, fell to $938 million in the first quarter, from $1.2 billion in the comparable 2008 quarter but grew from $873 million in the fourth quarter of 2008. Graphics revenue fell on both a year-over-year and sequential basis to $222 million.

AMD reported foundry revenue of $283 million for the first quarter. There were no comparable figures for the year-ago quarter because the business was spun off only recently.

By: DocMemory
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