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AMD earnings fall with rest of pack

Advanced Micro Devices' earnings fell sharply, reflecting a soft processor market.

Advanced Micro Devices reported sharply lower earnings in the second quarter, reflecting an increasingly bleak microprocessor business but also an increasingly dominant Intel.

AMD reported a net loss of $34.7 million on sales of $455 million for the quarter ending June 30. "The main cause of our revenue decrease was a significant decline in flash memory revenues from the immediate-prior quarter," AMD chairman and CEO W.J. Sanders III said in a prepared statement.

He conceded that AMD's Intel-compatible microprocessor division is also suffering. "AMD incurred a widening operating results from our other divisions were insufficient to offset the large losses we are currently experiencing in our Microsoft Windows-compatible microprocessor divisions," Sanders said.

Some analysts say AMD and other "alternative vendors" of Intel-compatible processors such as Cyrix are up against a wall as PC vendors almost across the board ally themselves closely with Intel, said Dean McCarron a principal at Mercury Research in Scottsdale, Arizona. AMD is in a particularly bad spot, he said, because it is supplying relatively low-performance Pentium-class processors while most PC vendors want higher-performance chips.

AMD says, however, that it shipped more than 200,000 Pentium-class processors in the second quarter.

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