AMD suffering from memory loss in Q4

Warning scares investors

AMD's flash business appears to have spoiled an otherwise decent fourth quarter.

AMD late Monday warned that its flash memory unit will likely show a loss when the company reports its fourth quarter results on Jan. 18 due to slow sales. In a previous forecast, AMD said it expected memory sales to be either flat or up during the quarter. Investors recoiled at the warning, sending AMD's shares down almost 8 per cent to $18.55 in after-hours trading - at the time of this report.

Overall, AMD expects to report sales for the fourth quarter that are slightly higher than the $1.24bn in sales it posted in the third quarter. AMD should still report a profit, but it's income will be "down significantly" from the third quarter's $68.4m.

Processor sales continue to impress and will likely be higher than third quarter sales, AMD said. The company's processor business should post a profit.

AMD's downward guidance likely means that rival Intel gained ground in the flash memory market and applied significant pricing pressure. ®

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