Tuesday, August 26, 2008

AMD shares up after deal to sell unit to Broadcom

Shares of Advanced Micro Devices Inc. climbed Monday after the chip maker struck a deal to sell a money-losing unit that makes chips for digital TVs.

The stock added rose 12 cents, or 2.1 percent, to $5.93. The stock, which has been pummeled in recent months, has ranged from $4.05 to $14.73 over the past year.

AMD said it would sell the TV unit to Broadcom Corp. for $192.8 million in cash as part of a move to focus on its core operations.

AMD accounted for the TV unit and a cell phone chip unit as discontinued in the second quarter, and took an $876 million writedown to their value. Both units came along with AMD's purchase of graphics-chip maker ATI Technologies in 2006.

Deutsche Bank analysts led by Bob Gujavarty said the sale "may modestly improve AMD's prospects for profitability," but estimate that the business only recorded a small loss.

"AMD should be more focused company, but now is even more dependent on the fortunes of the PC market for revenue," the analysts wrote.

AMD is a distant second to Intel Corp. in the market for computer processors.

From : http://www.businessweek.com/