Advanced Micro Devices Inc. (AMD) on Tuesday swung to a loss in the fourth quarter as "awful" pricing for memory microchips and a debt-related charge outweighed improving demand for computer processors.

AMD, whose top rival is Intel Corp. (INTC), also warned that sales of the memory chips, so-called flash chips, which are used in mobile phones and other electronics, would fall in the first quarter because of oversupply and tough competition.

AMD reported a net loss in the quarter ended Dec. 26 of $30 million, or 8 cents a share, compared with a year-earlier profit of $43.2 million, or 12 cents.

Sales rose to $1.26 billion from $1.21 billion in the same period last year. The results were in line with last week's lowered financial forecast.

Results in the most recent quarter included charges of $49 million, or 13 cents a share, to retire some debt and convert other debt to equity.

"We had an awful quarter in the context of an aggressive pricing environment" for flash memory, said Hector Ruiz, the chief executive officer of AMD. The results were largely in line with a revenue warning last week that cut AMD's stock price by a quarter.

Memory product sales fell to $504 million from $566 million and the division operating loss swelled to $39 million from $3 million. AMD's other big business, selling microprocessors for personal computers, had a stronger quarter, with sales rising to $730 million from $581 million last year.

The Sunnyvale, California-based company forecast improving momentum during the year in personal computer microprocessors, where AMD's Opteron and Athlon chips have gained share against Intel, but it said first-quarter sales should be flat to lower amid a regular drop off following the year-end holiday sales rush.

"Flat-to-down is certainly good news for them," said Allan Mishan, the semiconductor analyst for CIBC World Markets. "The potential for flat is a good thing."

AMD stock rose 34 cents, or 2.2 percent, to $15.50 on the New York Stock Exchange. In after-hours trading, the shares fell 2 percent to $15.20.

In a conference call with analysts, Ruiz said AMD had performed poorly in its flash memory business, and would take aggressive actions to keep costs down. Responding to a question about whether he would sell or spin off the memory business, Ruiz said he was keeping all options open.

"We are prepared to do whatever it takes to make sure that we get value to our shareholders going forward," Ruiz said.

AMD blamed the decline in flash memory sales on aggressive pricing, lower sales in Japan, and a delay in certifying one of its memory chips for use in wireless products.

The Sunnyvale, California-based chip maker said it reduced its debt during the quarter by $200 million through a conversion of convertible debt, and refinanced a $600 million loan it took out for a chip factory in Germany.