AMD Warns It Won't Meet 1Q Outlook

Discussion in 'Wall St. News' started by S2007S, Mar 5, 2007.

  1. S2007S

    S2007S

    AP
    AMD Warns It Won't Meet 1Q Outlook
    Monday March 5, 11:27 am ET
    By Jordan Robertson, AP Technology Writer
    AMD Warns It Won't Meet 1Q Revenue Outlook of $1.6B to $1.7B

    SAN FRANCISCO (AP) -- Advanced Micro Devices Inc. warned Monday that it was unlikely to meet its first-quarter revenue guidance of $1.6 billion to $1.7 billion, the latest in a series of disappointments for investors in the struggling chip-maker.

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    The company's stock briefly fell to a new 52-week low in early trading.

    AMD is hurting from a brutal price competition with much-larger rival Intel Corp. and has been punished by investors for a product lineup that some say is in dire need of an upgrade.

    Sunnyvale-based AMD did not disclose details of the revenue shortfall in a brief statement before financial markets opened Monday. CEO Hector Ruiz was expected to update the first-quarter guidance during a presentation later in the day at the Morgan Stanley Technology Conference in San Francisco.

    Analysts surveyed by Thomson Financial before the warning were expecting, on average, AMD to lose 25 cents per share on revenue of $1.66 billion for the first quarter.

    The company is coming off a painful fourth quarter that rattled investors and cast a pall over an otherwise impressive year of market-share gains at Intel's expense.

    For the last three months of 2006, AMD swung to a net loss of $574 million, primarily because of heavy charges related to the company's $5.6 billion acquisition of graphics chips maker ATI Technologies Inc.

    Despite stealing about 6 percent of the overall microprocessor market from Intel during 2006, AMD disappointed Wall Street by not providing enough details about how it would differentiate its future products from Intel's and manage the intense price competition between the two companies.

    Microprocessors are the core calculating engines of computers, and Intel and AMD are battling inch-by-inch for market share by offering processors boasting dramatic performance improvements while consuming as little energy as possible.

    AMD's stock fell 25 cents, or 1.8 percent, to $13.93 in morning trading on the New York Stock Exchange after sinking as low as $13.53 earlier in the session. Its previous 52-week low had been $14.13.