AMD issues fourth-quarter profit warning

When AMD announced its third-quarter financial results last October, the company stated that it expected strong demand and a sequential increase in sales in the fourth quarter. However, AMD has now issued a statement that says its revenue only increased 3% last quarter, and that its operating income was actually "substantially lower" than in the third quarter. The company blames "significantly lower microprocessor average selling prices" for the bleak results.

Indeed, AMD's price list hasn't changed much since the company's summer price cuts, but we did notice last month that Athlon 64 X2 prices had nonetheless gone down significantly at some online stores. Couple that with Dell's introduction of cheap AMD-based desktops in mid-September, and AMD's lower-than-expected results begin to make sense. On the upside, AMD does say its processors sales increased significantly.

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