AMD Warns, Plans Restructuring - TheStreet

AMD Warns, Plans Restructuring

The company puts first-quarter revenue well below Wall Street's forecast.
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Chip giant

Advanced Micro Devices

(AMD) - Get Report

again warned of a first-quarter revenue shortfall and said it plans to restructure its business model and slash capital spending.

AMD said Monday that it expects to report first-quarter revenue of $1.225 billion, well below Thomson Financial's average analyst estimate of $1.55 billion.

The company's original guidance had called for revenue of $1.6 billion of $1.7 billion, but AMD said last month that it was unlikely to meet that projection.

The company said its revenue declined sharply quarter over quarter for its computing segment, primarily because of lower average selling prices and "significantly" lower unit sales, particularly in the resale segment. AMD has been locked in a price war with rival

Intel

(INTC) - Get Report

that has weighed on both companies' financials.

AMD said it will "restructure its business model to increase operational efficiencies and lower its operating cost structure," including cutting back on discretionary spending and limiting hiring. The company also will reduce its capital expenditures by $500 million in 2007.

The company plans to provide further details during its first-quarter conference call, scheduled for April 19.