Advanced Micro Devices Inc. (AMD) Misses, Stock Falls

Shares of Advanced Micro Devices Inc. dropped about 12 percent Friday after the company issued a fourth quarter earnings warning.
Shares of the Sunnyvale, Calif.-based company (NYSE:AMD - News) fell $2.24 to $17.94 before closing the day at $18.26. AMD says the quarter's income, excluding segments connected with Canadian graphics chip maker ATI Technologies Inc. -- which it bought for $5.4 billion late last year -- and acquisition-related charges, is expected to be "positive but substantially lower than in the third quarter."
AMD, which has been locked in a close battle with rival Santa Clara-based Intel Corp. (NASDAQ:INTC - News), predicted its revenue will grow 3 percent over the previous quarter to about $1.37 billion. Analysts had expected, on average, revenue of $1.85 billion. The fourth quarter is usually a strong one for AMD and Intel because of holiday purchases.
AMD said the fourth quarter's income was hit by "significantly lower" microprocessor average selling prices, which largely offset a significant increase in unit sales.
In November, the company said it would cut about 375 jobs worldwide, with about 50 of them in Central Texas, saying the positions represented less than 1 percent of the about 14,900-person combined work force of ATI and AMD.
AMD employs about 3,000 in Central Texas.
Published January 15, 2007 by the Austin Business Journal

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