Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Paul Engel who wrote (46090)	1/14/1999 10:35:00 PM
From: Maverick	Read Replies (1) \| Respond to of 1583505

To remain competitive, AMD must respond with steep price cuts and introduce higher speed products at an accelerated pace," Kumar wrote. Profit Estimates Are Out Of AMD's Reach (01/13/99, 6:23 p.m. ET) By Sergio G. Non, TechWeb Advanced Micro Devices fell 4 cents short of consensus earnings estimates in its fourth quarter. Just a day after rival Intel swept past analyst estimates, Sunnyvale, Calif.-based AMD reported fourth quarter net income of $22.3 million, or 15 cents a share, for the quarter ended Dec. 27. First Call's survey of 23 analysts predicted a profit of 19 cents a share. Fourth quarter sales rose 16 percent sequentially to $788.8 million, less than Wall Street expectations, which were roughly in the $800 million range. A year earlier, AMD posted revenue of $613.1 million. The unit-shipment total of 5.5 million K-6 processors was in line with analyst forecasts. The company said its chips are now in 16 percent of all Windows PCs, 38 percent of sub-$1,000 computers, and 37 percent of PCs priced between $1,000 and $1,500. "They're doing very well in the low end of the retail market," Volpe Brown Whelan analyst Tim Mahon said prior to the earnings release. The current quarter should also be relatively strong for AMD. "Intel talked about unfulfilled Celeron orders," Mahon said. "I think the key beneficiary of that would be AMD." In the fourth quarter, AMD shipped hundreds of thousands of 400-MHz processors, but not enough to satisfy market demand, according to CEO W.J. Sanders III. "We expect to substantially increase shipments of 400-MHz processors in the current quarter," he said. With Intel boosting the performance of its low-end processor, Celeron, and stepping up marketing of the chip, AMD could see tougher times, Mahon and other analysts said. In a research note earlier this week, Piper Jaffray analyst Ashok Kumar reiterated a neutral rating for AMD stock. Computers with AMD processors will continue to sell in the consumer market, but the company isn't likely to get its processors into corporate PCs because of a renewed Celeron push, Kumar said. And AMD will find it harder to keep boosting the performance of its chips. "To remain competitive, AMD must respond with steep price cuts and introduce higher speed products at an accelerated pace," Kumar wrote. "We are concerned, for technical reasons, that AMD may not be able to switch from the 400- to 450-MHz with the same rapidity as the transition from 350- to 400-MHz."