GO
Loading...

Enter multiple symbols separated by commas

AMD Shares Rise on Cost Cutting Plans

Chipmaker Advanced Micro Devices said it expects to report first-quarter revenue of about $1.23 billion, well below Wall Street forecasts, and it announced a restructuring to cut costs.

AMD's shares gained in early trading . Larger rival Intel was also up .

The No. 2 microprocessor manufacturer said it plans to reduce 2007 capital expenditures by about $500 million, and that the cost cuts would not materially hurt capacity plans for the year. AMD also pledged to reduce discretionary expenses and limit hiring to critical positions.

AMD had warned investors early in March that it would miss its quarterly revenue target as it loses market share among computer resellers. At the time, it said revenue would fall short of a $1.6 billion to $1.7 billion goal outlined at the start of the year, but gave no precise estimates.

It was the second quarter in a row that AMD showed signs of trouble in a bruising price war with Intel that has eroded profits for both companies in the $30 billion processor industry.

AMD said on Monday that revenue for its computing solutions business declined sharply quarter-over-quarter, with a drop in prices and significantly lower unit sales. Its resale channel
was particularly affected.

Analysts on average had expected AMD to report revenue of $1.54 billion, according to Reuters Estimates. The company is due to report financial results on April 19 and said it would provide more details of its overhaul at that time.

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

  • Mark Cuban and Donald Trump

    Donald Trump appears to have Mark Cuban's vote, at least in terms of how the billionaire real estate mogul is conducting his political campaign.

  • Ferrari 488 Spider

    Ferrari's new 488 Spider will have a V-8 turbo engine and a retractable hard-top roof that lowers in just 14 seconds.

  • Members of the New Horizons science team react to seeing the spacecraft's last and sharpest image of Pluto before closest approach later in the day at the Johns Hopkins University Applied Physics Laboratory (APL) in Laurel, Maryland July 14, 2015.More than nine years after its launch, a U.S. spacecraft sailed past Pluto on Tuesday, capping a 3 billion mile (4.88 billion km) journey to the solar system's farthest reaches, NASA said.

    The New Horizons Pluto flyby mission set records for NASA's social media and web metrics——but why do we care so much?

U.S. Video