April 18, 2006 > Chip maker Advanced Micro stock falls on disappointing outlook
Chip maker Advanced Micro stock falls on disappointing outlook
by AP Wire Service
CHARLOTTE, North Carolina (AP), Apr 13 _ Advanced Micro Devices Inc. stock fell Thursday after the company's outlook fell below Wall Street expectations.
Shares of the chip maker fell $3.62, or 10 percent, to close at $31.80 on the New York Stock Exchange.
AMD's outlook weighed on shares Thursday, even though its first-quarter earnings per share handily beat expectations.
Although the Sunnyvale, California-based company will have an extra week of business in its second quarter, the company is forecasting revenue to be flat to down slightly from the first quarter.
While AMD did well in the first quarter, analysts said, its outlook is evidence that rival Intel Corp. is trying hard to regain lost market share.
Analysts have been predicting a price war will ensue this year.
ThinkEquity analyst Eric Ross, who rates AMD a ``sell,'' said in a research report that AMD should have forecast revenue to be up in its second quarter given the extra week of business. He said AMD will be affected by price cuts initiated by Intel.
Analysts had expected AMD to weigh in with second-quarter revenue of $1.35 billion (euro1.12 billion), which is higher than the $1.33 billion (euro1.1 billion) it posted in the first quarter.
The company said it earned $185 million (euro153 million), or 38 cents a share, on revenue of $1.33 billion (euro1.1 billion) in the first quarter.
In the same period a year earlier, it lost $17.4 million (euro14.4 million), or 4 cents a share, on revenue of $1.23 billion (euro1.02 billion). Analysts were expecting earnings of 30 cents a share, according to Thomson Financial.