I have had success doing it like this in the past:
$thumb = imagecreatetruecolor($newwidth, $newheight);
imagealphablending($thumb, false);
imagesavealpha($thumb, true);
$source = imagecreatefrompng($fileName);
imagealphablending($source, true);
imagecopyresampled($thumb, $source, 0, 0, 0, 0, $newwidth, $newheight, $width, $height);
imagepng($thumb,$newFilename);
I found the output image quality much better using imagecopyresampled()
than imagecopyresized()