AMD to miss Q1 revenue target
Sunnyvale (CA) – Ahead of its presentation at the Morgan Stanley Technology Conference today, AMD said that it is unlikely to meet its previously estimated revenue guidance of $1.6 to $1.7 billion for the first quarter of 2007.
For the second time in a row, AMD apparently will have sobering news for its investors, which are likely a result of the ongoing processor price war with Intel. AMD remains under pressure, but recently stated that it is not willing to give up any of the market shares it has gained in the past 20 months.
In Q4 2006, AMD lost $574 million, which, however, was mainly a result of charges related to the acquisition of ATI. But even with the acquisition excluded, AMD barely broke even in what normally would be a tech company’s strongest quarter of the year. With its processor prices continuing to decline, AMD is likely to see another two rough quarters: The Barcelona (server) and Agena (desktop) quad-core processors are expected to lift AMD’s average selling prices and bring some stability into the firm’s business.
Following the announcement, AMD's stock fell about 1.5% or $0.22 to $13.95, the lowest level since October 11, 2004.