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AMD profit drops; sales rise 3%

January 12, 2007|From Bloomberg News

Advanced Micro Devices Inc.'s fourth-quarter profit tumbled because of falling semiconductor prices sparked by Intel Corp.'s push to regain market share.

Operating profit, excluding results of recently acquired ATI Technologies Inc., fell "substantially" from the third quarter, Sunnyvale, Calif.-based Advanced Micro said in a statement without elaborating. Sales, excluding ATI revenue, rose about 3% from the $1.33 billion reported in the previous period.

Advanced Micro, the only remaining competitor to Intel in personal computer processors, is facing renewed pressure from its larger rival, which introduced new products and cut prices to snatch back market share. Although Advanced Micro had won orders in servers with its Opteron chip, it won't have an updated version until midyear.

"It's going to be tougher and tougher for AMD. They're giving share back to Intel," said Eric Ross, an analyst at ThinkEquity Partners in New York.

Shares of Advanced Micro gained 17 cents to $20.18. They fell 44 cents to $19.74 in extended trading after the announcement.

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