AMD sees 2nd quarter sales decline

Shares in chipmaker AMD have fallen dramatically after the company released a statement saying that its second quarter sales would miss estimates by a wide margin.

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By  Robin Duff Published  July 8, 2001

Shares of chipmaker AMD have fallen dramatically after the company released a statement saying that its second quarter sales would miss estimates by a wide margin. Second-quarter sales are expected to dip as much as 17 percent from the first quarter's $1.19 billion mark, more than the previously predicted 10 percent decline.

Although the news for the company seems bad, there is cause for optimism, as the reasons behind the shortfall— PC price pressure and low demand for flash memory chips— are seen as short-term. The price war with Intel has also played a role too, according to some US –based analysts.

"We think AMD has continued to take market share from Intel in desktop PCs and AMD maintained its overall share of the PC processor market, but the gain in the quarter was more than offset by Intel's aggressive pricing strategy instituted earlier this quarter," wrote Morgan Stanley Dean Witter analyst Mark Edelstone, who lowered 2001 and 2002 earnings estimates.

What should help, analysts said, is an upsurge in demand, which most predict will begin slowly in the second half of this year and into 2002, with the growth likely to come from newer chipos such as the Athlon/Thunderbird processor.

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