AMD warns of earnings shortfall

Advanced Micro Devices (AMD) has warned for the third time that it faces a earnings shortfall for its first fiscal quarter, citing lower than expected shipments of K6-2 processors and a drop in the average selling prices of the company's chips due to severe competition.

Based on preliminary analysis, first-quarter revenues for the company are expected to be about $US630 million, compared with $US541 million for the same quarter a year ago, and $US789 million in the fourth quarter of 1998.

AMD shipped 4.3 million K6-2 processors in the first quarter of this year, "substantially below plan," the company said in a statement. While the vendor was selling fewer chips than expected, AMD was also making less revenue on each processor than in prior quarters. Price competition, particularly for processors with frequencies below 400MHz, forced average selling prices for K6-2 chips down to $US78, the statement said.

In addition, "previously reported yield problems that impacted December production of AMD-K6-2 processors continued to take a heavy toll on production volume and mix through the first eight weeks of 1999 as earlier material worked through the manufacturing process," the company said.

The situation improved last month, however, and the company expects to meet its goal of shipping 20 million to 25 million units for the whole of 1999.

"Based on March production results and the planned production mix of AMD-K6-2 and AMD K6-III processors, and initial shipments of AMD-K7 processors scheduled for June," the company anticipates that average selling prices for K6-2 processors will improve in the current quarter.

The chip company is scheduled to announce its actual first-quarter results on April 14.

Last month AMD announced that it expected to report a significant loss for the first quarter and that it planned to lay off 300 workers as part of a cost-cutting restructuring.

The company issued its first warning about a first-quarter loss in February. It did not provide any preliminary revenue estimates until this announcement.

Join the PC World newsletter!

Error: Please check your email address.

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Elinor Mills

PC World
Show Comments

Essentials

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Michael Hargreaves

Windows 10 for Business / Dell XPS

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?