AMD Sees 1Q Revenue Miss
Advanced Micro Devices Inc. said Monday it expects its first-quarter revenue
to miss Wall Street expectations, weighed by lower prices and slumping sales,
and announced plans to restructure its business model.
The company pegged its quarterly revenue at about $1.23 billion, below analysts
consensus view of $1.55 billion according to Thomson Financial, and shy of its
prior outlook for $1.6 billion to $1.7 billion in sales which it warned in March
it would likely not meet.
The company cited lower overall average selling prices and significantly lower
unit sales, especially in the resale channel.
Advanced Micro Devices also said it plans to restructure its business model
to increase efficiencies and lower costs. Plans include slashing capital expenditures
in 2007 by about $500 million, as well as reducing discretionary expenses and
limiting hiring to critical positions.
The company and rival Intel Corp. have been slashing prices aggressively as
part of a pricing battle which has taken a toll on the chip makers' profits.
Advanced Micro Devices is scheduled to report its first-quarter earnings after
the markets close on April 19.
Despite the sales projection, shares of Advanced Micro Devices added 72 cents,
or 5.6 percent, to $13.58 in morning trading on the New York Stock Exchange
after falling to a 52-week low of $12.60 on Thursday. The stock is off nearly
37 percent since the start of the year.