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Price war exacts AMD toll

Sales down. Losses up

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AMD warns that its third quarter loss will be far larger than previously projected, due to weaker than expected sales. The new figure is expected to be between $90 and $110 million (excluding restructuring and one-time charges, which will add about $80-110 million to the bill).

The profit warning comes at a time when the company is selling a record number of CPUs: more than 7.7 million in the quarter. It says falling prices, as a result of its price war with Intel, have bought about the increase in projected losses.

Sales for the quarter dropped 22 per cent (instead of the anticipated 15 per cent). Revenues declined from $1.2bn to $766m, dropping below even the revised analyst expectations of $824.7m. It also says that sales of its flash memory fell about $100m from the previous quarter.

This year, it has lost IBM in North America and Europe, Gateway, Tiny and most of Micron as customers, adding to its woes.

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