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AMD Reports $600 Million Second-Quarter Loss

AMD expects its high-end quad-core Barcelona processors, due out next month, to increase sales in the second half.
Intel, which introduced its quad-core chips last year, has been releasing a slew of new desktop, server and mobile-computer products, while dropping prices on older models. Besides keeping pressure on AMD, the strategy has also taken its toll on Intel. The company on Tuesday reported a 44% jump in profits to $1.28 billion, but lower-than-expected gross margins. Revenues increased 8% to $8.7 billion.

Meanwhile, market researcher iSuppli reported Tuesday that AMD managed to stabilize its market share in the second quarter, following six months of losses to Intel. The firm estimates that AMD accounted for 11.4% of worldwide microprocessor sales, up half a percentage point from the first quarter. AMD's market share had fallen to 10.9% in the first quarter from 16.8% in the third quarter 2006.

Intel, meanwhile, lost a half-point in the second quarter, falling to 80.3% from 80.8%. The drop ended a major resurgence in market-share during the prior two quarters, iSuppli said.

A strong worldwide PC market helped sales for AMD and Intel. Gartner has said PC shipments were up 11.7% in the second quarter, and rival International Data Corp. has pegged the increase at 12.5%.

AMD provided few details in its third-quarter forecasts, saying it expects revenue "to increase in line with seasonality."