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Virtualization: AMD Bleeding Badly from War with Intel

Intel must be bruised around the pocketbook as well

AMD pre-announced its March quarter, complaining that revenues had suffered a sharp quarter-over-quarter decline to roughly $1.225 billion, down 8% year-over-year. It blamed lower overall ASPs and "significantly" lower unit sales, especially in the resale channel, pretty much the same problems it had in Q4 when it lost money.

Early last month the company warned that it wouldn't make its $1.6 billion-$1.7 billion forecast. It just didn't say by how much. So Wall Street was still thinking revenues would still amount to $1.55 billion. Silly Wall Street.

What saved AMD from seeing its stock price get splattered against the wall again was the news that it's going to cut its planned capital expenditures by a half-billion dollars, about 20%, saying it's unlikely to impact capacity plans this year. In other words, no sense making more of what you're not selling away. Of course, it's leaving next year to take care of itself.

But, anyway, it won't have to get financing to fund that $500 million CAPEX. If it could get funding - or that speculated equity investment. Some people wonder. Others wonder if half-a-billion is enough.

Of course AMD is also going to cut discretionary spending and institute a job freeze, limiting hiring to just filling critical positions. Apparently wholesale job cuts aren't in the cards at this point.

It's promising more details when it reports its numbers on April 19. The details could include the admission that it's losing market share. It owned a 25% piece at the end of the year.

Intel must be bruised around the pocketbook as well.

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SYS-CON's Virtualization News Desk trawls the news sources of the world for the latest details of virtualization technologies, products, and market trends, and provides breaking news updates from the Virtualization Conference & Expo.

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Virtualization News 04/25/07 05:20:22 PM EDT

AMD pre-announced its March quarter, complaining that revenues had suffered a sharp quarter-over-quarter decline to roughly $1.225 billion, down 8% year-over-year. It blamed lower overall ASPs and 'significantly' lower unit sales, especially in the resale channel, pretty much the same problems it had in Q4 when it lost money. Early last month the company warned that it wouldn't make its $1.6 billion-$1.7 billion forecast. It just didn't say by how much. So Wall Street was still thinking revenues would still amount to $1.55 billion. Silly Wall Street.