AMD to Take a Big Write-Down of ATI Assets
Swallowing ATI Technologies seems to be causing some financial heartburn for AMD, and the company now needs the financial equivalent of Alka Seltzer: a big write-down of intangible assets related to ATI.
In a brief 8-K filing with the Securities and Exchange Commission, AMD said the current carrying value of its goodwill (translation: the value of ATI’s assets) “was impaired” (translation: it’s worth a lot less than planned).
AMD reached this conclusion based on an updated financial analysis for the year ahead, when it does its annual goodwill examinations. It also comes one day ahead of an analyst conference in New York, where the company will likely face questions about the write-down.
In the filing, AMD reported it expects that the impairment charge (translation: write-off) will come in the current quarter and “will be material, but the Company has determined that, as of the time of this filing, it is unable in good faith to make a determination of an estimate of the amount or range of amounts of the impairment charge.” An amended filing with estimates or ranges of estimates will be filed within four days.
AMD spokesman Drew Prairie said ATI had a bad Q4 in 2006 and has been slowly recovering from it. During the quarter, the unit’s HD2000 video card line were delayed coming to market. ATI also faced problems stemming from a troubled “mobility customer,” though he did not elaborate. Since then, the division has been recovering.
“It shouldn’t be read as a statement that businesses are performing worse in this quarter or Q3 or Q2 than they were a year ago,” he told InternetNews.com. “It’s not like an analysis was done and said they’ve been sliding for the year.”