Hit by falling sales, AMD to announce lower Q2 results

Advanced Micro Devices Inc. (AMD) will announce financial results for the second quarter of 2001 after the close of U.S. markets Thursday. Wall Street analysts polled by Thomson Financial/First Call expect the company to report sharply lower earnings.

The earnings announcement comes one week after the company warned that its second quarter sales would be lower than it initially projected. It now expects sales to drop to US$985 million, down 17 percent on the previous quarter's figure of $1.189 billion. In April, AMD projected sales during the second quarter would drop by just 10 percent quarter-on-quarter. The drop in second-quarter sales, which AMD has blamed on weak sales of flash memory, represents an 11-percent decline in sales compared to the same period last year.

Before the earnings warning, Wall Street analysts predicted AMD would post second-quarter earnings of $0.27 per share, but they now expect to see the company post earnings of just $0.04 per share, according to a consensus earnings estimate by Thomson Financial/First Call. That represents a sharp decline from the first-quarter earnings of $0.37 per share reported by the company in April. Earnings of $0.04 per share also represent a sharp drop compared to results reported by AMD for the second quarter of 2001, when it posted earnings of $1.21 per share.

AMD's stock price remained relatively stable ahead of Thursday's earnings announcement. The stock (NYSE: AMD) closed Wednesday at $21.12, up $0.12.

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