AMD Warns of Revenue Shortfall

Mar 05, 04:14 PM

Current Headlines: By Ryan Blitstein, San Jose Mercury News, Calif.

Mar. 5--Computer chip maker Advanced Micro Devices said today that its first quarter sales will fall short of the company's own expectations of $1.6 to $1.7 billion. AMD Chief Executive Hector Ruiz plans to explain the revenue shortfall this morning at the Morgan Stanley Technology Conference in San Francisco, the company said in a statement.

The profit warning comes barely a month after Sunnyvale-based AMD announced a tough fourth quarter of 2006, during which the company reported a net loss of $574 million. Much of that was due to a $5.4 billion acquisition of graphics chip maker ATI Technologies, but the company's core revenue growth and profit margins fell due to a brutal price war with arch-rival Intel in the computer server market.

Among analysts surveyed by Thomson Financial, the average expected first quarter revenue for AMD was $1.66 billion. The company's stock had fallen $0.28 to $13.90 as of 8:45 a.m.

Contact Ryan Blitstein at rblitstein@mercurynews.com or (408) 920-5715.

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