Advanced Micro Devices Inc., the No. 2 microprocessor maker, reports its second-quarter results on Thursday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: Beleaguered chip maker AMD has been roughed up by larger rival Intel Corp. this year as AMD faces delays in product launches and heavy costs related to its $5.6 billion purchase of graphics chip maker ATI Technologies.
AMD began an eventful second quarter by announcing it would cut 10 percent of its global work force, or about 1,600 employees, by September. Shortly thereafter, the company announced the departure of Chief Technology Officer Phil Hester.
However, AMD offered investors reason for hope in early June when it debuted a new chip platform for laptops. The offering was seen as an overhaul of the company's mobile chip lineup which could help fuel a recovery at the Sunnyvale, Calif.-based company.
Last week, AMD said it will write down the value of its handheld and digital television units _ acquired when it purchased ATI _ by $880 million in the second quarter. The company also expects to record restructuring charges of $32 million for employee severance costs.
BY THE NUMBERS: Analysts polled by Thomson Financial expect AMD to report a loss of 52 cents per share on revenue of $1.45 billion.
ANALYST TAKE: Deutsche Bank analyst Ross Seymore expects AMD to report results in line with Wall Street estimates, saying performance in the company's graphics chip segment could outperform expectations.
In AMD's quarterly results, Seymore will be looking for more information on PC unit growth, market share performance against Intel and graphics chip maker Nvidia Corp., average sales prices and AMD's restructuring.
Cowen and Co. analyst John Barton took a similarly cautious stance.
"We continue to believe that industry demand trends are tracking at the low end of normal seasonality and within the original guidance of most companies," he wrote in a note to investors last week. "However, given the challenging economic environment and competitive dynamics, we expect management to offer fairly conservative revenue guidance for the September quarter."
WHAT'S AHEAD: Seymore predicted AMD will provide more detail on its cost-cutting efforts, particularly the amount of expected savings through 2008 and 2009.
"These cost savings may reduce AMD's operating losses but any such positive impact is likely to be modest," he wrote.
STOCK PERFORMANCE: Shares of AMD grew as much as 35 percent in the quarter through June before beginning a sharp decline to finish the quarter flat. The stock has continued falling since then, changing hands Tuesday at a seven-year low of $4.53.
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