AMD warns of significant dip in Q4 earnings

AMD has issued an earnings warning for the fourth quarter due to lower microprocessor prices
  • John Blau (IDG News Service)
  • 15 January, 2007 12:14

Tumbling microprocessor prices have prompted AMD to warn of a dip in earnings ahead of its fourth-quarter results at the end of the month.

The chipmaker expected fourth-quarter operating income to be positive but substantially lower than in the third quarter, it said last week.

The company, which gave no figure, reported operating income of $US119 million in the third quarter.

AMD attributed the dip in earnings to a sharp drop in prices for PC processors, which largely offset a significant increase in unit sales.

For the fourth quarter, which ended on December 31, AMD expects revenue, excluding its recent acquisition of ATI Technologies, to increase 3 per cent from the $US1.33 billion reported in the third quarter.

Analysts had been expecting AMD to report fourth-quarter revenue of $US1.85 billion and earnings per share of $US0.23, according to Thomson Financial.

AMD, which will report its fourth-quarter results on January 23, has been taking semiconductor market share away from rival, Intel, in the last year with new dual-core processors, forcing Intel into a defensive posture.