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To: KevinThompson who wrote (4099)	10/2/2002 7:48:17 PM
From: KevinThompson	Respond to of 10157

AMD is toast. They appear to be headed for ultimate demise as an on-going concern. Too much product in the inventory channels, cannot sell product at same pricing as Intel, products do not perform comparably to Intel's, and they are delaying next generation chip until next year. And Oh ya, analysts had projected a 49 cent loss per share on $617M revs this quarter, but now they are reducing rev outlook to only $500M. ------------------------------------------------------ =DJ AMD Cites Stagnant PC Market For Sales Shortfall 10/02/2002 Dow Jones News Services (Copyright © 2002 Dow Jones & Company, Inc.) By Mark Boslet Of Dow Jones Newswires PALO ALTO, Calif. (Dow Jones)--Advanced Micro Devices Inc. (AMD) sharply lowered its projection for third-quarter sales citing a stagnant personal-computer market and company efforts to reduce inventory. The chip maker said sales should be about $500 million for the September-ended quarter compared with the more than $600 million it estimated 2 1/2 months ago at the end of the second quarter. AMD said it anticipated a "substantial operating loss" for the quarter, according to a press release issued after the close of trading. A spokesman declined additional comment on the announcement. AMD shares slumped 19%, or $1.01, to $4.36 in after-hours trading. "In the absence of any significant improvement in PC demand in the just-completed quarter, we accelerated our efforts to reduce processor inventory in the PC supply chain," said Robert Rivet, AMD's chief financial officer in a statement. He said the move to cut inventory at distributors put pressure on revenue, unit sales and the average selling price of the company's chips. However, analysts said AMD's problems go beyond the ailing PC market. The company's chips trail those of rival Intel Corp. (INTC) in raw speed, putting it at a disadvantage in the marketplace. Intel also aggressively cut prices at the start of September. Lehman Brothers analyst Dan Niles estimates AMD sold its chips at an average price of $50 each in the third quarter, or about one-third the price Intel was able to charge. The pricing imbalance is hard to overcome. "The magnitude of the (quarterly) miss is unbelievable," Niles said. Making matters worse, AMD said during the quarter that it delayed the release of its next-generation desktop chip, the Clawhammer, until early next year. The large sales shortfall is the second in a row for AMD. Some analysts said they didn't anticipate an upturn in the market soon. "The PC environment is weak," said Eric Ross, an analyst at Investec. Ross said he doesn't own AMD stock and that Investec has no banking business with the company. PC sales in the fourth quarter typically show a 20% increase over the third quarter. Ross said he anticipates only a 5% to 10% increase this year. He also said his expectation for losses in the third and fourth quarters widened, to 67 cents a share from 50 cents and to 58 cents from 44 cents, respectively. Analysts had expected a loss of 49 cents for the third quarter on revenue of $617 million prior to the company's announcement. AMD plans to release third-quarter results on Oct. 16. -Mark Boslet, Dow Jones Newswires, 650-496-1366 mark.boslet@dowjones.com