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| UPDATED: 2006-04-14 |
 AMD Profits Up, Shares Pummeled 
By: David Utter 2006-04-14 Intel may soon enjoy a measure of revenge in the wake of AMD's gains on the leading chipmaker in the server market. AMD posted a solid first quarter,...  ... with sales of $1.33 billion, operating income of $259 million, and net income of $185 million, or $0.38 per share for the quarter ended March 26, 2006.
That showed dramatic year over year improvement from 2005, where AMD's first quarter numbers posted a loss of $17.4 million, or four cents a share. AMD said results included "a stock-based compensation expense of $15 million due to the implementation of SFAS 123(R) and an expense of $20 million associated with the partial redemption of senior notes." Despite the gaudy first quarter, where analysts had only expected 29 cents in earnings per share, investors found reason to punish AMD anyway due to its guidance about the second quarter: AMD expects second quarter sales to be flat to slightly down seasonally from the first quarter of 2006. If achieved, this would approximate a 65 percent increase from comparable sales in the second quarter of 2005.
Shares of AMD fell 3.62 a share to 31.80, a drop of over 10 percent. And with Intel (INTC) readying new products for the next two quarters, AMD may be facing a much bigger fight in the global market. Intel announced today it would partner with Chinese search engine firm Baidu (BIDU) to deliver search and other Internet services to China's growing online userbase. Baidu leads the Chinese search market, and competes heavily with local companies like Alibaba, owner of Yahoo China, and US firms Microsoft and Google, the latter a minority shareholder in Baidu. Its arrangement with Intel indicates a desire to expand beyond the desktop. "In addition to PCs, our users will soon be able to access Baidu search services on their handsets and home devices,'' said Jerry Liu, CTO of Baidu. The work they accomplish with Intel will make searching the Internet "convenient and fun." Freescale (FSL) once provided Apple with PowerPC chips, as did IBM. Once Apple shifted to an Intel platform, Freescale continued to focus on the many markets its supplies, such as the handheld consumer market. Its latest entry there, an integrated wireless LAN (WLAN) platform, provides support for IEEE(R) 802.11 a/b/g standards and is intended for video and audio conferencing, video streaming and voice-and-video-over-IP (V2IP) applications, the company recently announced. More importantly, it is a low-power chip, an essential feature for modern devices. MIPS Technologies Inc (MIPS) leaped 6.71% to 7.47 in heavy trading; volume exceeded 548,000, more than double its average, ahead of next Thursday's earnings call. The embedded processor company recently announced its own low-power chip news, licensing the MIPS32 24KEc core to Fangtek, which plans to use it for developing "high-performance, cost-effective cell phone media processors." Munich-based Infineon Technologies AG (IFX) nudged upwards to 10.67 in trading. Bloomberg reported bullish sentiment from analysts at Dresdner Kleinwort Wasserstein inspired them to raise their recommendation on Germany's biggest semiconductor maker from "add" to "buy." But Transmeta (TMTA) remained relatively flat as it again began work for Sony and Microsoft. The company was able to renew agreements with Sony for another year and continue working on low-power microprocessor projects for the Tokyo-based technology power. Though Microsoft and Transmeta have been working together on a "proprietary project" according to Transmeta's SEC filings, it is known that the work was not on Microsoft's Origami project. That devices released by manufacturers contained chips from Intel and not Transmeta. Former Microsoft co-founder Paul Allen has long been thought to be one of Transmeta's earliest backers, going back almost ten years. He definitely provided investment capital to the company in 2000, the New York Times reported, as Allen's Vulcan Ventures, Inc joined with Soros Fund Management and several tech companies to provide $88 million in funding. --- Tags: AMD, Intel, Freescale, MIPS Technologies, Infineon Technologies, Transmeta Add to | DiggThis | Yahoo! My Web | PreFound.com Keep up with IFN and bookmark us today - 
View All Articles by David Utter About the Author: David Utter is a staff writer for InternetFinancialNews and WebProNews covering technology and business. |
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