|AMD reports its third-quarter results after market close.|
SUNNYVALE, Calif. ( TheStreet) -- AMD's ( AMD) new CEO Rory Read will oversee his first quarterly earnings after the market close on Wednesday with investors keen to hear his plans for revitalizing the No. 2 chipmaker. As if fierce competition from CPU giant Intel ( INTC) and graphics specialist Nvidia ( NVDA) were not enough of a challenge, AMD has also felt the burn from recent production problems.
AMD lowered its third-quarter sales forecast last month, citing manufacturing issues that limited supplies of its Llano chip. "There will definitely be a spotlight on Read," Sergis Mushell, principal research analyst at Gartner, told TheStreet. "This is really the conference call for him to set forth what happens
to AMD moving forward -- there are several markets where he needs to clearly state where the company is going." The server market, where AMD was once the leader, will likely prove a key area of focus, according to the analyst. "They need to get into some of the major data centers like Google ( GOOG)," he said. "The majority of these data centers today are building their own servers -- a well executed plan there will result in imminent success." Former IBM ( IBM) and Lenovo executive Read joined AMD in August, ending the company's seven-month search for a permanent chief after the ouster of former CEO Dirk Meyer earlier this year. Prior to joining AMD, Read served as COO of Lenovo. During his five-year tenure at the Chinese gadget giant, Read also led Lenovo's entry into the tablet and smartphone markets. Gartner's Mushell thinks that Read may spell out AMD's tablet strategy, particularly after Microsoft ( MSFT) endorsed the chipmaker, along with the likes of Intel and Nvidia, for its Windows 8 operating system. The new CEO should also focus on AMD's strong legacy in graphics chip technology, he added. "AMD needs to work out where their CPU and graphics strength will be combined," explained the analyst. "They need to have a vision for their graphics division and work out what's next." Inevitably, Read will also face questions on the production problems that forced the company to revise its third-quarter sales forecast. AMD blamed its lowered numbers on yield, ramp and manufacturing issues at a GLOBALFOUNDRIES factory in Dresden, Germany that limited supply of its 32-nanometer chip. This weighed heavily on AMD's stock, which has traded down more than 27% his year. Thanks to the manufacturing problem, AMD expects its third-quarter revenue to increase just 4% to 6% year over year, well below its prior forecast of 8% to 12% growth. Analysts surveyed by Thomson Reuters are looking for AMD to post sales of $1.65 billion and earnings of cents a share, compared to $1.62 billion and 15 cents a share in the same period last year. AMD shares were up 23 cents, or 4.42%, at $5.32 on Thursday. --Written by James Rogers in New York >To follow the writer on Twitter, go to http://twitter.com/jamesjrogers. >To submit a news tip, send an email to: email@example.com.