AMD issues warning of disappointing third quarter


Sunnyvale, Calif. -- Advanced Micro Devices Inc. said it expects third-quarter sales and earnings to fall from the previous quarter because of big price cuts on a chip used in personal computers.

The semiconductor company shipped the same number of AM486 microprocessors as in the previous quarter, although at "sharply lower prices," it said in a statement yesterday.

The slowdown in revenue growth from the AM486 chip probably will continue through the year until Advanced Micro starts shipping a more powerful chip in 1996, the company said.

W. J. Sanders III, chairman and chief executive of AMD, said, "The 486 market is shifting rapidly to higher-speed parts. While we expect fourth-quarter AM486 unit demand to increase, it is unlikely that AMD microprocessor revenue growth will resume until the company begins shipping products with fifth-generation performance in 1996."

AMD is expected to earn 86 cents a share, according to the average estimate of 21 analysts surveyed by Zacks Investment Research.

The company plans to release its quarterly results Oct. 10.

AMD said it anticipates that its other product lines will post a 10 percent increase in revenue from the previous quarter.

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