AMD to take $948 million second-quarter charge
Advanced Micro Devices announced Friday that it would take a total of $948 million in charges in the second quarter, sending its stock down as much as 7 percent in early morning trading.
Shares of the chipmaker fell as low as $4.60 a share in early trading, or down approximately 7 percent. AMD was trading at $4.82, down 2.8 percent, later in the morning.
AMD noted the bulk of its charges will come from a continuing deterioration in the goodwill value of its former ATI handheld and DTV units, which are part of AMD's Consumer Electronics Group. Write-downs for the intangible value, or goodwill, of those units are approximately $880 million.
It's not the first time AMD has had to take a large write-down charge because of the deteriorating goodwill value of its ATI acquisition.
Last year, AMD took a whopping $1.6 billion write-down for ATI's declining goodwill, which is the intangible value assigned above a company's actual assets at the time of a purchase. AMD paid $5.4 billion for ATI in 2006, $3.2 billion of which was composed of goodwill.
In addition to the ATI and DTV charges, the chipmaker noted it will take a $32 million restructuring charge, which largely came from severance payments paid in the second quarter and will continue through the rest of the year.
The company will also take charges for declining value in some of its investments that appear to be less than temporary. An approximate $24 million charge relating to AMD's Spansion stock and a $12 million charge resulting from its auction rate securities holdings will be taken in the second quarter.
AMD expects to report its second-quarter financial results Thursday, after the market closes.
Dawn Kawamoto covers enterprise security and financial news relating to technology for CNET News. E-mail Dawn. 




- by limefan913 July 11, 2008 3:25 PM PDT
- Get_Bent: I think that's pretty much happening to AMD.
- Like this Reply to this comment
-
(3 Comments)On the positive side, I think that the ATI division is finally on the right track and getting things going. Hopefully AMD's CPU division can get things kick started.