Intel, AMD chip battles play out on Wall Street

FORT COLLINS – People driving through the intersection of Harmony and Ziegler roads during the week of April 14 might have heard some raspberries being blown across the street from the rival chip manufacturers on opposite corners there.

Intel Corp. (Nasdaq: INTC) and Advanced Micro Devices Inc. (NYSE: AMD) released closely watched earnings that week. While the chip war was waged between engineers innovating in labs on Harmony Road in Fort Collins, the companies played it out financially on Wall Street.

Both companies had revised their previously stated first-quarter expectations prior to the end of the quarter. Intel revised its gross margin from 56 percent to 54 percent.

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AMD’s revision was a little more extreme. A week before earnings came out, the company announced it expected a 15 percent quarter-over-quarter decline in revenues “due to lower than expected sales across all business segments,” according to the company release. Previously, the company had estimated that the revenue decline from fourth to first quarter would be in line with seasonal decreases, which are closer to 7 percent for the industry.

Intel was first up, releasing its first-quarter earnings on April 15. Despite a 12 percent year-over-year decrease in net income, Intel’s earnings were hailed as the silver lining in a decidedly gloomy market. Company income of $1.4 billion was down compared to last year, but revenues were up 9 percent to $9.7 billion.

Intel’s stock was up almost 6 percent to $22.13 the day following the release.

AMD unfortunately did not fare as well. The company reported its sixth consecutive quarterly net loss on April 17. The company saw a $358 million loss on revenues of $1.5 billion. But the lower-than-expected earnings had little impact on investor sentiment. The morning following the earnings release, AMD’s stock was actually up a few cents.

The hold in the stock price could be related to the company’s restructuring plans. When the company announced its revised earnings, it also revealed plans to cut about 10 percent of its worldwide workforce of 16,500. The cuts are anticipated across all business lines and should be completed by the end of the third quarter.

“We remain committed to achieve operating profitability in the second half of the year, driven by our portfolio of new products and platforms and aggressive restructuring programs,´ said AMD CFO Robert Rivet.

A call to an AMD spokeswoman for details on the potential local impact were not returned in time for publication of this story.

Web site of the month

Whether you think news reports on inflation are inflated or you are already hiding out in your bomb shelter with a pile of gold bricks, understanding and tracking inflation is more than just a daunting task – it’s also boring and, potentially, depressing. That’s why InflationData.com is my Web site of the month – it does the dirty work for you.

InflationData.com offers current, month-to-month inflation rate data dating all the way back to 1914, calculated using the latest Consumer Price Index information released by the U.S. Bureau of Labor Statistics.

Knowing the current inflation rate can give you insight into whether or not your investment in a certificate of deposit or other vehicle is keeping up with the cost of goods. For example, rate cuts by the Federal Reserve Board have forced CD rates down into the range of 2 percent to 3 percent annual percentage yield, while the inflation rate for February was 4.03 percent.

In addition to the raw data, the site’s author, Tim McMahon, offers insight into what inflation means through articles and commentary. Particularly ambitious visitors could even discover how to calculate inflation for themselves.

What’s more, the site offers calculators for finding the inflation between two periods of time and a salary inflation calculator that shows how much your salary will need to increase to keep up with the current rate of inflation.

The site is definitely not a looker – Web-safe colors, basic link/e-mail tools and conspicuously placed text-only ads. But the amount of data in it makes it worth the visit. Plus, the site creator offers up several versions of the inflation rate table that will automatically update as a free download for your own site.

If you would like to recommend an interesting site to feature in this column, feel free to e-mail me the URL and a few words about why you like it.

Kristen Tatti covers technology for the Northern Colorado Business Report. She can be reached at 970-221-5400, ext. 219 or ktatti@ncbr.com.