The chief of
Advanced Micro Devices
said in a meeting with analysts Thursday that the company will turn a profit next year, according to reports.
That would mark a big improvement over the gloomy outlook on Wall Street. Analysts currently expect the company to lose money until the fourth quarter of 2004, according to Thomson Financial/First Call.
AMD is expected to announce further details of a much-needed turnaround strategy at Thursday's analyst meeting. On its most recent conference call in October, management said the company will cut costs by as much as $350 million in 2003. AMD's chairman has said it needs to pare 10% to 20% of its workforce of over 13,000 in order to break even, according to a report in the
San Francisco Chronicle
In a statement Thursday, CEO Hector Ruiz said, "We are accelerating our strategy to reset our business model and lower our corporate break-even point. We have already begun implementing aggressive actions in the fourth quarter that are expected to significantly reduce our quarterly breakeven point in 2003."
AMD will take a fourth-quarter pretax charge of several hundred million dollars to cover restructuring costs.
The company also reaffirmed its previous guidance for sequential sales growth of 20%, based on seasonal growth, better inventory control, and expectations of improvement in sales of flash memory.
In early afternoon trading, shares were off 17 cents, or 2.4%, to $7.06.