AMD to Tell Us Where It Hurts

Excluding the ATI results, AMD has warned that its fourth-quarter operating income will be positive but substantially lower than the third quarter's $119 million.

AMD also said that sales in the fourth quarter increased 3% from the $1.33 billion revenue in the third quarter. That's a good deal lower than AMD's initial expectation for a seasonally strong fourth quarter, which the company defined as ranging from 6% to 13% sequential growth by historical standards.

Of course, AMD's outlook will be of utmost importance for investors. Analysts are expecting EPS to remain flat and revenue to move up moderately in the first quarter, as little is expected to change near term in the existing competitive dynamics between AMD and Intel.

But with AMD expected to become more competitive by about midyear, when it introduces a new generation of processors, any details AMD provides for the full-year 2007 financial expectations, in addition to updates on its technology rollout, will be key.