AMD’s profit under threat
San Francisco: In the turf war that has come to characterise the computer chip market, Advanced Micro Devices (AMD), appears to have stumbled in the fourth quarter. AMD, the second-largest maker of the microprocessors, issued a warning that its fourth-quarter revenue would miss Wall Street’s forecasts because of lower unit prices, signaling that the price war between AMD and its main rival, Intel, had taken its toll. AMD, based in Sunnyvale, California, said that it expected fourth-quarter revenue to increase about 3%, but $1.37 billion, over the third quarter. Fourth-quarter operating income, the company said, is expected to be positive but substantially lower than the third quarter. In October, analysts forecast AMD’s fourthquarter sales would be about $1.44 billion, excluding revenue gained from its $5.4 billion acquisition of ATI. AMD executives said at the time that they expected a seasonally strong fourth quarter, which included the holiday shopping season. The chip maker said its Q4 gross margin and operating income were hurt by lower average selling prices, though unit sales rose over all. AMD plans to issue its Q4 earnings report on January 23 after the close of regular trading. In the last few years, the company has managed to gain market share, as the market leader, Intel, has struggled to revamp its product line. The threat of competition led Intel to lay off over 10,000 employees and cut costs sharply last year. NYT NEWS SERVICE
San Francisco: In the turf war that has come to characterise the computer chip market, Advanced Micro Devices (AMD), appears to have stumbled in the fourth quarter. AMD, the second-largest maker of the microprocessors, issued a warning that its fourth-quarter revenue would miss Wall Street’s forecasts because of lower unit prices, signaling that the price war between AMD and its main rival, Intel, had taken its toll. AMD, based in Sunnyvale, California, said that it expected fourth-quarter revenue to increase about 3%, but $1.37 billion, over the third quarter. Fourth-quarter operating income, the company said, is expected to be positive but substantially lower than the third quarter. In October, analysts forecast AMD’s fourthquarter sales would be about $1.44 billion, excluding revenue gained from its $5.4 billion acquisition of ATI. AMD executives said at the time that they expected a seasonally strong fourth quarter, which included the holiday shopping season. The chip maker said its Q4 gross margin and operating income were hurt by lower average selling prices, though unit sales rose over all. AMD plans to issue its Q4 earnings report on January 23 after the close of regular trading. In the last few years, the company has managed to gain market share, as the market leader, Intel, has struggled to revamp its product line. The threat of competition led Intel to lay off over 10,000 employees and cut costs sharply last year. NYT NEWS SERVICE
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