The world’s No. 2 microprocessor maker, Advanced Micro Devices Inc. said it won’t return to profitability until the second half of next year and delayed the full release of the product it says will enable its recovery.
“We have gone through a very difficult time, reacted quickly and decisively, and we are on our way to really have, I believe, a phenomenal transition year in 2008,” CEO Hector Ruiz said at an analyst conference Thursday in New York.
AMD, which has been struggling to catch up with much larger Intel Corp., is committed to breaking even in the second quarter and returning to profitability in the third, Ruiz said.
In response, investors sent AMD’s shares to their lowest level since August 2003. The stock closed at $8.84 Thursday, down 13 cents, but had traded as low as $8.42 during the day.
“The lack of specific information is likely the chief culprit of the shares’ weakness,” wrote Stifel Nicolaus analyst Cody Acree in a note to investors. He found the analyst day more positive than AMD’s share price indicated.
“We believe the information was incrementally encouraging, and that AMD is in the process of a solid recovery,” he wrote.
AMD’s stock has taken a beating the past two years amid fears the Sunnyvale-based company has been losing some of its competitive edge against Intel because of debt from a costly acquisition and because its technology is aging.
AMD shares have plunged nearly 80 percent from early 2006, when they traded above $40 and the company’s market value was more than $20 billion. AMD’s market value is less than $5 billion today, and the stock has been stuck under $10 for two weeks.
Many on Wall Street had hoped AMD would provide details on its “asset lite” strategy to sell off some factories and outsource manufacturing tasks to cut costs,…