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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Process Boy who wrote (63029)	6/23/1999 7:43:00 PM
From: kash johal	Read Replies (3) \| Respond to of 1570833

PB, First analysis from conf. call: This is from cbs marketwatch: SUNNYVALE, Calif. (CBS.MW) -- Adding to its string of quarterly disappointments, Advanced Micro Devices warned Wednesday it will lose $200 million in the second quarter, as cutthroat pricing by rival Intel cuts into proceeds from its core line of computer chips. Today on CBS MarketWatch Nasdaq closes higher, Dow dips Nasdaq may go IPO Multex.com buys Market Guide Oil sector jumps on supply squeeze StockWatch: CEOs, Hong Kong and more More top stories... CBS MarketWatch Columns Updated: 6/23/99 4:17:04 PM ET The chipmaker (AMD: news, msgs), issuing its fourth warning in two consecutive quarters, also said it expects revenue for the quarter won't exceed $600 million vs. $632 million in the first quarter. Analysts polled by First Call Corp. were expecting the company to report a loss of 40 cents a share. AMD, based in Sunnyvale, Calif., didn't issue an estimate in per-share terms. Ahead of the news, AMD shares dipped 1 1/16 to 18 3/16. AMD said it's unlikely to sell more than 3.7 million units of its K6 microprocessors, the low cost chips that are popular with manufacturers of hot-selling sub-$1000 personal computers. "Heavy gray market activity worldwide, which has only recently subsided, makes it unlikely that the company will get the sell-through needed to achieve unit sales growth," the chipmaker said in a statement. The company said it was squeezed by pricing pressures in the market as a result of very aggressive pricing on Celeron processors from rival Intel (INTC: news, msgs). This was already aggravated by AMD's performance in the first quarter when the chipmaker was unable to ship enough of its K6 processors to fill orders, causing customers to turn to Intel. As a result AMD was unable to capture very many of those lost customers. "This has backfired to Intel as well because they have seen a much larger portion of demand coming from the low-end processors and Celerons, which is where they've really priced aggressively and that's had a negative effect on Intel's average selling prices," said Charles Boucher, an analyst at Donaldson, Lufkin & Jenrette. Separately, AMD today announced that it began shipping its much-anticipated new K7 microprocessor. See press release. "The K7 is correctly perceived as a serious competitive threat to Intel's Pentium III family, and the fact that the K7 appears to be in the market early on time and at high-performance levels is going to create some additional competitive concerns for Intel," said Boucher. W.J. Sanders, AMD's chief executive, said that while the second-quarter operating losses will be offset by the more than $400 million pre-tax gain on the recently concluded sale of Vantis, its programmable-logic subsidiary, the operating results are a "bitter disappointment."