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News > Technology
AMD's 2Q falls short
July 5, 2001: 5:32 p.m. ET

Computer chipmaker cites slack demand, competition for earnings miss
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NEW YORK (CNNfn) - Computer chipmaker Advanced Micro Devices on Thursday said its second-quarter sales and earnings will fall short of the Street's expectations amid slack demand and increased competition in the market for its products.

The Sunnyvale, Calif.-based company said it expects to report sales of $985 million and earnings ranging between 3 cents and 5 cents per share for the quarter ended July 1.

Analysts generally had expected AMD (AMD: Research, Estimates) to log sales of $1.08 billion and a profit of 27 cents per share, according to a survey conducted by earnings tracker First Call.

Shares of AMD fell $1.12 to $28.64 on the New York Stock Exchange ahead of the announcement. They plunged to $24.75 in extended hours trade.

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When AMD, the second-leading supplier of PC microprocessors flash memory chips behind Intel, reported its first-quarter results in April, executives had said they were anticipating a sequential revenue decline nearer 10 percent.

In a brief statement released after the close of trading Thursday, the company pinned the blame for the shortfall on continued pricing pressure in the market for PC microprocessors and weaker-than-expected demand for flash memory chips, which are designed to retain data even after the device in which they are installed is powered off.

AMD, whose Athlon microprocessors have become an increasingly large thorn in Intel's side, has been steadily pecking at its market share. Although Intel still garners about 80 percent of the market for PC processors, the deep-pocketed company has been aggressively pricing its Pentium 4 processors as part of an effort to thwart AMD's advances.

Just this week, Intel rolled out its fastest Pentium 4, operating at 1.8 gigahertz, with a price tag of $562. When the company first introduced the Pentium 4 in November, its 1.5 GHz version was priced at $819.

Executives at AMD have vowed to keep pace with whatever pricing moves Intel might make. Jerry Sanders, the company's chief executive, promised analysts in April that AMD would match Intel's prices "clock cycle by clock cycle."

In a brief statement released after the close of trading Thursday, AMD said that the competitive pressures in the PC processor market had depressed the average selling prices of its chips, which played a part in the quarterly shortfall.

Even so, AMD said it achieved record unit sales of its PC processors during the quarter.

The company also pointed to weak demand for flash memory chips, which are widely used in mobile phones and other portable electronic devices, as a reason for the shortfall. It did not elaborate on the performance of that product line, which demonstrated similar weakness in the first quarter.

AMD is expected to release its full second-quarter results on July 12. graphic





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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.