Chip Maker AMD Warns On 3Q Sales

AMD now expects revenues for the period ending Sept. 29 to be about $500 million. In July, it had estimated revenues to improve slightly over the $600 million reported in the second quarter.

"At these reduced sales levels, the company anticipates a substantial operating loss for the quarter," AMD said in a release.

Analysts were expecting the Sunnyvale, Calif.-based company to post a loss of 49 cents per share on sales of $614.1 million, according to a survey by Thomson First Call.

Shares of AMD lost $1.10, or more than 20 percent, in extended-session trading. Before the warning, shares closed 10 cents higher, at $5.37, in Wednesday trading on the Nasdaq Stock Market.

Robert Rivet, AMD's chief financial officer, blamed the lower sales on continued weakness in the personal computer market. AMD makes the Athlon and Duron microprocessors.

However, sales of flash memory used in cellular phones and other digital devices continued to improve, he said.

AMD held out hope for stronger sales leading up to the holiday season.

"Going into the fourth quarter, AMD and its customers are in a much-improved position to take advantage of the anticipated seasonal improvements in demand," Rivet said.

On Tuesday, AMD announced its fastest processors yet, the Athlon XP 2700++and the Athlon XP 2800 . Systems built around the chips are expected to be available in late November.

The company also recently delayed the debut of its next-generation 64-bit processors for desktop computers. The chips, code-named Clawhammer, had been set to debut at the end of this year. They will now be released early next year.

AMD will release its third-quarter results on Oct. 16.

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