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

To: Elmer who wrote (45975)	1/14/1999 2:03:00 PM
From: Maverick	Respond to of 1570972

AMD's 4th-qtr earnings fall short due to production problems (Adds analyst comments, details, byline.) By Duncan Martell PALO ALTO, Calif., Jan 13 (Reuters) - Computer-chip maker Advanced Micro Devices Inc. reported fourth-quarter earnings that fell short of analyst forecasts because of production problems, sending its shares tumbling in after-hours trading. The company, Intel Corp.'s chief rival in the microprocessor market, said on Wednesday it had net income of $22.3 million, or 15 cents a diluted share, compared with a loss of $12.3 million, or 9 cents, in the year-ago period. Revenue rose 29 percent to $788.8 million from $613 million, but the results lagged analyst forecasts of 19 cents a share, according to First Call Corp., which tracks such figures. Although the scrappy chipmaker had made substantial progress since its huge loss last year, it tripped again in the fourth quarter because it couldn't churn out enough of the faster K6 II chips that customers wanted. The K6 II with 3DNow multimedia-enhancing technology competes against some of Intel's chips. "This was not a good quarter in terms of execution," said analyst Mark Edelstone of Morgan Stanley Dean Witter in San Francisco. "Intel is just humming along and AMD cannot afford to louse up its manufacturing." On Tuesday, the cross-town rival said its fourth-quarter net income rose 18 percent to $2.1 billion, or $1.19 a share, from $1.7 billion, or 98 cents, a year ago, surpassing even the most rosiest of analyst forecasts. The strong results at Intel, the world's largest chipmaker, were fueled by robust sales across all its product lines. Sunnyvale, Calif.-based AMD has gained ground recently against chief rival Intel Corp. in the U.S. retail PC market, but the cross-town rival has introduced speedier Celeron chips to gain back that lost market share. AMD stock was down at $27.63 in after-hours trading, down from its close of $31.63 in New York Stock Exchange trading. In regular trading, the stock rose 13 cents. Even so, AMD, which lost money in its non-microprocessor businesses, such as flash memory and other types of semiconductors, shipped a good number of its K6 chips. At 5.5 million chips shipped in the fourth quarter an with plans to do the same in the first, it's on track to meet its target of 20 million to 25 million units a year. Revenue for AMD's K6 chips rose by more than $100 million to $488 million from the third quarter, said W.J. "Jerry Sanders, AMD's chairman and chief executive. "We should be able to increase our K6 family revenues" in the first quarter as well, he told analysts on a teleconference call following the earnings report. "Someone of the end of the quarter is going to be left with excess inventory" of microprocessors, the brains of PCs, said Ashok Kumar, an analyst with Piper Jaffray Inc. in Minneapolis. "And as it stands now, AMD's going to get left holding the bag." ((Duncan Martell, Palo Alto, Calif. bureau, 650-846-5401, duncan.martell@reuters.com))