Transmeta Losses Lessen, Revenue Declines

Transmeta Corp. continued its trek toward profitability by reporting a narrower loss for the fourth quarter. The company on Thursday said that revenue, however, shrank from the year-ago period.

Transmeta, known for is low-power Crusoe and Efficeon microprocessors, reported a net loss of $21.6 million on revenue of $3.6 million for the fourth quarter. During the previous quarter, the company reported a net loss of $23.7 million on revenue of $2.7 million. In the year-ago quarter of 2002, Transmeta recorded a net loss of $21.7 million on revenue of $6.1 million.

Transmeta raised $78 million through a stock offering, and the company should hold over $113.0 million in cash and short-term investments by the end of March.

Transmetas performance for fiscal 2003 was equally unbalanced, as the company reported a loss of $72.4 million (excluding charges) on revenue of $17.3 million. During fiscal 2002 the company turned in a wider loss of $110.0 million, but also had increased revenue of $24.2 million.

According to officials, Transmetas goal is to achieve break-even in 2005. Meeting that goal will depend on the company selling its Crusoe processor at an average price of between $20 to $30, and to bring Efficeon prices to between $70 to $80, said Svend Olav Carlsen, the companys chief financial officer, during a conference call with analysts.

Despite the continued losses, company executives, were upbeat.

“We are receiving very strong feedback from notebook manufacturers on our Efficeon processor on a 90nm process,” said Matthew Perry, president and chief executive of Transmeta. He said Transmeta just received its first test samples of the Efficeon processor on a 90nm process from its foundry partner, Fujitsu. “The results are encouraging,” Perry said, adding that production shipments should begin in the second half of 2004. “This should give us a substantial advantage in product SKUs versus our competitors published roadmaps,” Perry said.

The company said it expects first-quarter revenue to be between $5.0 million and $6.0 million, with operating expenses of approximately $19.2 million. The bulk of the companys growth will be derived from the mobile computing and thin-client markets, as well as the licensing of the companys LongRun 2 power-management technology, officials said.