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Chip-maker cuts revenue forecast by $100 million

Posted on: Wednesday, 25 June 2003, 06:00 CDT

Chip-maker cuts revenue forecast by $100 million

By MATTHEW FORDAHL Associated Press

Wednesday, June 25, 2003

San Jose, Calif. -- Blaming lower sales in Asia on the SARS outbreak, chip-maker Advanced Micro Devices Inc. slashed its second- quarter revenue forecast Tuesday by $100 million.

Sunnyvale, Calif.-based AMD now expects sales for the period to be $615 million, down from an earlier estimate of $715 million.

The maker of Athlon, Duron and Opteron microprocessors has been struggling for more than a year as a result of rollout delays and stiff competition from its much larger rival, Intel Corp.

"The anticipated global sales improvement in the month of June did not materialize as we had anticipated," said Robert Rivet, AMD's chief financial officer. He said sales from chips used in PCs and cell phones were down significantly in Asia because of severe acute respiratory syndrome.

Analysts expect AMD to lose 28 cents per share on sales of $723 million in the second quarter. AMD will report its full second- quarter results July 16.

In the first quarter, the company lost $146 million, or 42 cents per share, compared with a loss of $9 million, or 3 cents a share, in the same period last year.

In April, AMD launched its Opteron processors, which can handle data in 64-bit chunks, twice the size of today's standard 32-bit processors. It plans to launch a version of the chip, dubbed Athlon 64, for desktop computers later this year.

But it won't be alone. On Monday, Apple Computer Inc. unveiled its next-generation Power Macintosh, which is based on the 64-bit PowerPC G5 processor manufactured by IBM Corp. IBM calls the chip the PowerPC 970.

So far, Intel has not jumped into the 64-bit desktop fray. Its 64- bit strategy is focused on the Itanium.

Shares of AMD were down 28 cents to close at $6.31.

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