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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Burt Masnick who wrote (84292)	6/23/1999 1:23:00 PM
From: Robert Douglas	Read Replies (1) \| Respond to of 186894

AMD Falls on Concern About 2nd-Qtr, New Chip Delay Sunnyvale, California, June 23 (Bloomberg) -- Advanced Micro Devices Inc., the biggest rival to Intel Corp., fell as much as 8.8 percent on concern that it will have a larger-than-expected second-quarter loss and may delay shipments of its newest chip. AMD fell 1 9/16 to 17 11/16 at early afternoon. Earlier, it touched 17 9/16. AMD is holding a conference call today after U.S. markets close. It gave no details on the subject of the call. Intel, the No. 1 computer-chip maker, rose 7/8 to 56 9/16. AMD is counting on its new K7 processor to help it compete against Intel's Pentium III chips. The K7 is crucial for AMD as prices for its low-end K6-2 plummet and Intel introduces faster Celeron chips. Analysts said AMD may ship the first versions of the K7 on time this month, though high-volume production may be delayed until later this year, causing losses to widen. ''It's definitely a loss for the quarter,'' said analyst Ashok Kumar of U.S. Bancorp Piper Jaffray. ''The only question is will it be the same magnitude as the first quarter? It could be.'' The company, based in Sunnyvale, California, had a loss of $118.8 million, or 81 cents a share, in the first quarter. AMD originally had been expected to have a profit in that quarter. It warned three times that Intel's price cuts and a production glitch would result in a loss. For the second quarter, analysts are expecting a loss of 40 cents a share, the average estimate from First Call Corp. Forecasts range from a loss of 18 cents to a loss of 73 cents. ''It was a very ugly quarter,'' said analyst Charles Boucher of Donaldson Lufkin & Jenrette. He said some AMD customers who switched to Intel products in the first quarter, when AMD couldn't make enough chips, didn't return, which pushed shipments down. K7 Shipments Kumar said he expects the company to give further details on the introduction of K7, including when volume production will start. High-volume manufacturing is important for AMD because the largest personal-computer makers, including No. 1 Compaq Computer Corp., won't integrate the K7 into their machines until they can guarantee availability. ''There's a good chance they'll say no volume shipments until the fourth quarter,'' said Kumar, who has a ''neutral'' rating on AMD's stock. Analyst Jonathan Joseph at Salomon Smith Barney cut his second-quarter estimate for AMD to a loss of 55 cents from an earlier forecast for a loss of 18 cents. Joseph cut his 1999 estimate for AMD to a loss of $1.67 from a loss of 71 cents. He maintained his ''neutral'' rating. Joseph slashed his forecast for second-quarter K6 shipments to 4.2 million from about 5 million and trimmed his forecast for K7 shipments to 400,000 from 700,000 for this year.