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AMD meets lowered expectations |
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Thursday, 17 April 2008 |
 (AP) Advanced Micro Devices Inc.'s first-quarter loss matched Wall Street's lowered expectations, with the slumping chip maker hurt by its inability to unload older products amid economic turbulence that tamped down domestic consumer spending.
The Sunnyvale-based company said Thursday that it lost $358 million, or 59 cents per share, during the first three months of the year, its sixth quarterly loss in a row. AMD lost $611 million, or $1.11 per share, in the same period last year.
Stripping out 8 cents per share in one-time charges connected to AMD's acquisition of graphics chip maker ATI Technologies, the company lost 51 cents per share in the latest period, matching the average estimate on the same basis from analysts polled by Thomson Financial.
Sales of $1.51 billion were 22 percent higher than last year and in line with analysts' expectations.
AMD warned earlier this month that sales across all business lines were lower than it earlier anticipated. It also announced plans to jettison 10 percent of its global work force, or about 1,600 workers, by September.
Chief Financial Officer Robert Rivet blamed the first-quarter loss on seasonal weakness, the economy and lower-than-expected sales of old products.
He added that the company expects to become profitable on an operating basis in the second half of 2008.
AMD has racked up more than $4 billion in losses in a skid that stretches back to the last three months of 2006, when intensifying competition from larger rival Intel Corp. and the costs of the ATI acquisition began to take their toll on AMD.
Lengthy product delays have also hurt AMD's ability to win new customers and steal market share from Intel.
AMD's new Opteron server chip — critical to the company's financial recovery — was delayed for 8 months after its official launch in September because of technical glitches. They didn't roll out in force until this month, when Hewlett-Packard Co. began shipping servers with the new chips.
Wall Street was bracing for more bad news from AMD, so the fact that its losses weren't any deeper than analysts feared helped lift the stock 11 cents, or nearly 2 percent, to $6.30 in after-hours trading. AMD shares closed up 12 cents, to $6.19, before the results were reported.
The stock is still way off its recent high of $42.10 in early 2006, when AMD was steadily stealing market share from Intel with chips that were seen as more energy-efficient. After Intel fired back with a powerful new lineup, AMD's stock began sliding.
Meanwhile, Intel's profits are improving because it has made a speedy transition to a new chip-making technology that lowers the cost of production.
AMD lags Intel in making its own transition to the 45-nanometer manufacturing process, which means the chips' circuitry is shrunken to an average size of 45 billionths of a meter. Smaller circuitry means chips cost less to make and they can hold more transistors.
AMD said its 45-nanometer products are expected in the second half of 2008.
In reporting first-quarter results Tuesday, Intel kept its profit-margin expectations for 2008 intact, a sunny forecast that indicates the company is tightly controlling its pricing and manufacturing costs while AMD continues to stumble.
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SanDisk sales beat on gadget demand |
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Thursday, 17 April 2008 |
 (Reuters) SanDisk Corp. (SNDK), the world's top maker of data-storage memory chips, issued a strong sales forecast on Thursday and said it expected memory price declines to moderate in the current quarter.
Shares of SanDisk, down about 22 percent this year, rose 4.6 percent on the news, which came after the company reported higher-than-expected first-quarter revenue, citing strong demand for memory chips used in consumer gadgets.
SanDisk said sales were helped by its international business, by demand for its Sansa music players, and by mobile-phone and satellite-navigation device buyers.
But its average price per megabyte sold fell 61 percent from the year-ago quarter, and 29 percent from the fourth quarter, as competitors liquidated inventories "at prices that were at or below cost," said SanDisk CEO Eli Harari.
Harari said the company planned to expand in markets that are less vulnerable to sharp price declines, such as corporate data storage, where he said premiums could be significant.
"Conditions should improve gradually as the low-price inventory is sold through the channels," he told analysts on a conference call.
Harari said SanDisk expects price declines to moderate in the current quarter, but cautioned that product profit margins would remain under pressure as lower-cost chips would not be released until the second half.
First-quarter net income was $17.9 million, or 8 cents per share, compared with a net loss of $575,000 a year earlier when SanDisk had more than $20 million in acquisition-related costs.
Revenue rose 8 percent to $850 million, exceeding analysts' average forecast of $812.2 million, according to Reuters Estimates. In January, SanDisk had projected first-quarter revenue of $775 million to $875 million.
Excluding acquisition-related expenses and other items, SanDisk earned 21 cents per share, less than average projection of 27 cents per share, according to Reuters Estimates.
The company forecast second quarter revenue in a range of $875 million to $950 million. The midpoint of the range, $912.5 million, was higher than the average Wall Street forecast of $903.5 million, according to Reuters Estimates.
SanDisk shares rose to $27.10 in extended trading following the results, compared to their close of $25.90 on Nasdaq. |
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Users petition to keep Windows XP |
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Monday, 14 April 2008 |
 (AP) Microsoft Corp.'s operating systems run most personal computers around the globe and are a cash cow for the world's largest software maker. But you'd never confuse a Windows user with the passionate fans of Mac OS X or even the free Linux operating system.
Unless it's someone running Windows XP, a version Microsoft wants to retire.
Fans of the six-year-old operating system set to be pulled off store shelves in June have papered the Internet with blog posts, cartoons and petitions recently. They trumpet its superiority to Windows Vista, Microsoft's latest PC operating system, whose consumer launch last January was greeted with lukewarm reviews.
No matter how hard Microsoft works to persuade people to embrace Vista, some just can't be wowed. They complain about Vista's hefty hardware requirements, its less-than-peppy performance, occasional incompatibility with other programs and devices and frequent, irritating security pop-up windows.
For them, the impending disappearance of XP computers from retailers, and the phased withdrawal of technical support in coming years, is causing a minor panic.
Take, for instance, Galen Gruman. A longtime technology journalist, Gruman is more accustomed to writing about trends than starting them.
But after talking to Windows users for months, he realized his distaste for Vista and strong attachment to XP were widespread.
"It sort of hit us that, wait a minute, XP will be gone as of June 30. What are we going to do?" he said. "If no one does something, it's going to be gone."
So Gruman started a Save XP Web petition, gathering since January more than 100,000 signatures and thousands of comments, mostly from die-hard XP users who want Microsoft to keep selling it until the next version of Windows is released, currently targeted for 2010.
On the petition site's comments section, some users proclaimed they will downgrade from Vista to XP -- an option available in the past to businesses, but now open for the first time to consumers who buy Vista Ultimate or Business editions -- if they need to buy a new computer after XP goes off the market.
Others used the comments section to rail against the very idea that Microsoft has the power to enforce the phase-out from a stable, decent product to one that many consider worse, while profiting from the move. Many threatened to leave Windows for Apple or Linux machines.
Microsoft already extended the XP deadline once, but it shows no signs it will do so again. The company has declined to meet with Gruman to consider the petition. Microsoft is aware of the petition, it said in a statement to The Associated Press, and "will continue to be guided by feedback we hear from partners and customers about what makes sense based on their needs."
Gruman said he'd keep pressing for a meeting.
"They really believe if they just close their eyes, people will have no choice," he said.
In fact, most people who get a new computer will end up with Vista. In 2008, 94 percent of new Windows machines for consumers worldwide will run Vista, forecasts industry research group IDC. For businesses, about 75 percent of new PCs will have Vista. (That figure takes into account companies that choose to downgrade to XP.)
Although Microsoft may not budge on selling new copies of XP, it may have to extend support for it.
Al Gillen, an IDC analyst, estimated that at the end of 2008 nearly 60 percent of consumer PCs and almost 70 percent of business PCs worldwide will still run XP. Microsoft plans to end full support -- including warranty claims and free help with problems -- in April 2009. The company will continue providing a more limited level of service until April 2014.
Gillen said efforts like Gruman's grass-roots petition may not influence the software maker, but business customers' demands should carry more clout.
"You really can't make 69 percent of your installed base unhappy with you," he said.
Some companies -- such as Wells Manufacturing Co. in Woodstock, Illinois -- are crossing their fingers that he's right. The company, which melts scrap steel and casts iron bars, has 200 PCs that run Windows 2000 or XP. (Windows 2000 is no longer sold on PCs. Mainstream support has ended, but limited support is available through the middle of 2010.)
Wells usually replaces 50 of its PCs every 18 months. In the most recent round of purchases, Chief Information Officer Lou Peterhans said, the company stuck with XP because several of its applications don't run well on Vista.
"There is no strong reason to go to Vista, other than eventually losing support for XP," he said. Peterhans added that the company isn't planning to bring in Vista computers for 18 months to two years. If Microsoft keeps to its current timetable, its next operating system, code-named Windows 7, will be on the market by then.
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Google Map Spec Now A Standard |
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Monday, 14 April 2008 |
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 (Cnet) Members of an industry group called the Open Geospatial Consortium have approved Google's KML technology as an open standard for describing some geographic data.
KML is used to manage the display of geospatial information in Google Earth, the company's software for flying over the surface of a virtual globe. With its 3D coordinate-based system, people can create models of city buildings, draw a line showing where they hiked, or overlay their own custom place names on a generic map.
Google already shared its KML format openly, and others had used it in software products, but Google now hopes that its status as an official standard will decrease barriers to further adoption.
"What OGC brings to the table is...everyone has confidence we won't take advantage of the format or change it in a way that will harm anyone," said Michael Weiss-Malik, Google's KML product manager. "The goal is to prevent market fragmentation," in which different technology uses different standards.
File formats may sound mundane, but they can give strategic value to those who control them as a gateway to the data held by people and companies. In one high-profile example, open-source allies launched an attack on Microsoft's Office stronghold with the OpenOffice.org software, which could mostly read Microsoft's file formats.
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Yahoo Deals With Google, AOL |
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Wednesday, 09 April 2008 |
 (AP) Yahoo Inc. is surrendering some of its advertising space to Internet search leader Google Inc. in an unusual test announced Wednesday that could be just the first step in a last-ditch effort to escape its unsolicited suitor, Microsoft Corp.Yahoo also is close to unveiling a complex plan that would combine its Web site with Time Warner Inc.'s fallen Internet star, AOL. Under that plan, Yahoo also would spend billions of dollars to buy back stock to put some money in shareholders' pockets, according to a Wall Street Journal story Wednesday night that cited unnamed people familiar with the matter. But Microsoft reportedly is mounting a counterattack if Yahoo's maneuvering forces it to raise its bid. In a surprise twist, Microsoft has contacted Rupert Murdoch's News Corp. about joining forces to buy Yahoo, according to a New York Times report, also posted online late Wednesday, that cited people involved in the discussions. Yahoo has been working for more than two months to put together a package that trumps Microsoft's takeover bid. It has explored aligning with News Corp.'s online hangout, MySpace.com, for example. All the negotiations are at a sensitive stage and still could unravel, according to the newspapers' reports. Contacted late Wednesday, a Yahoo spokesman declined to comment on the reported AOL talks. Microsoft representatives didn't respond to inquiries. Microsoft has set an April 26 deadline for Yahoo to accept its current offer, which was initially valued at $44.6 billion, or $31 per share. Because Microsoft wants to pay for half of the acquisition with its recently declining stock, the deal is currently valued at about $42 billion, or $29.24 per share. Under the ad deal announced Wednesday, Google will show ads tied to about 3 percent of the queries made in the United States through Yahoo's search engine -- the Internet's second largest after Google's. Yahoo will still use its own technology -- acquired and developed at a cost of more than $2 billion -- to place ads next to the other search results on its Web site. The Sunnyvale-based company also will continue to distribute search ads to its own partners. Together, Google and Yahoo control more than 80 percent of the U.S. search market, making it highly unlikely that antitrust regulators would allow the Silicon Valley rivals to form a long-term advertising alliance, analysts said. A broader relationship between Yahoo and Google also would face intense political scrutiny, said Sen. Herb Kohl, D-Wisconsin, who chairs a committee overseeing antitrust issues. By flirting with Google, Yahoo is trying to signal it has other options besides succumbing to Microsoft, said Standard and Poor's equity analyst Scott Kessler. But Kessler doubts most investors will take the Google alternative seriously, given the antitrust obstacles. "It doesn't make a lot of sense for Yahoo to make an announcement like this when everyone knows a long-term relationship (with Google) can't happen," Kessler said. "It strikes me as somewhat desperate." Investors weren't impressed with Google test. Yahoo shares dipped 3 cents in extended trading after gaining 7 cents to finish the regular session at $27.77. Yahoo's dalliance with Google makes a friendly deal with Microsoft less likely and raises the odds that Microsoft will follow through on a recent threat to lower its bid, Kessler said. Microsoft has said that if things can't be worked out amicably, it is prepared to oust Yahoo's 10-member board in a proxy contest that could prolong the drama into the summer. If the Google tests were to begin immediately, they would be completed shortly before the April 26 deadline Microsoft has set for accepting its bid. Yahoo didn't specify when the trial run would begin, but said the test doesn't mean it will join the thousands of other Web sites that rely on Google to place text-based advertising links next to search requests or their other content. Google's partnerships generated $5.8 billion in ad spending last year, with nearly $5 billion of that going to the Web sites participating in the network. Drawing upon Google's moneymaking prowess theoretically would help Yahoo bounce back from a two-year streak of declining profits that opened the door for Microsoft's takeover bid. Yahoo maintains it is worth more than $45 billion, a point that it reinforced in a letter sent to Microsoft Chief Executive Steve Ballmer early this week. Before the Microsoft bid, Yahoo's market value had sunk to roughly $27 billion, or $19.18 per share. In a statement Wednesday, Microsoft reiterated its bid is fair and pointed out the antitrust problems likely to prevent Google and Yahoo from working together. Google and Yahoo together control about 81 percent of the U.S. search market, according to the most recent data from comScore Media Metrix. "This would make the market far less competitive, in sharp contrast to our own proposal to acquire Yahoo," said Brad Smith, Microsoft's general counsel. "We will assess closely all of our options." A combination between Microsoft and Yahoo also would likely face an extensive regulatory review that could last anywhere from six months to a year, predicted Nate Eimer, a Chicago attorney specializing in antitrust law. Microsoft and Yahoo have a combined 31 percent market share in the United States, according to comScore. That's far behind Google's 59 percent. |
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