AMD will restructure business after earnings drop

AMD has warned investors that it would restructure its business model after lowering its first-quarter earnings forecast

Ten days before it is due to report earnings, AMD has warned investors that it would restructure its business model in reaction to a steep drop in quarterly revenue

AMD expects to report revenue of $US1.225 billion for the quarter ending March 31, 2007, down from the company's prior forecast of $1.6 billion to $1.7 billion. The number would also be lower than AMD's performance in the first quarter of 2006, when it reported revenue of $1.33 billion.

AMD has relied heavily on sales of its Opteron server chip to produce healthy revenue in recent years, but that stream has shrunk since competitor Intel launched its similar Woodcrest Xeon server chip in November. Since then, Intel has upgraded its manufacturing from 90-nanometer chip designs to 65nm chip designs faster than AMD, which is still targeting mid-2007 for the launch of its Barcelona quad-core Opteron chip. Barcelona will be AMD's first 65nm server/desktop chip.

More specifically, the shortfall was driven by sharp drops in both units sold and their average selling prices, particularly in the resale channel of the company's computing solutions area, AMD said in the statement. Computing solutions includes desktop and laptop PCs, workstations and servers powered by 64-bit processors

To fix the problem, AMD will cut its 2007 capital expenditures by $500 million and limit corporate hiring to only critical positions. Those moves should help to increase the company's operational efficiencies and lower its operating cost structure, the company said.

AMD is scheduled to report its formal earnings on April 19.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Ben Ames

IDG News Service
Show Comments

Cool Tech

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Breitling Superocean Heritage Chronographe 44

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?