Street Spanks AMD on Profit Worries
 

Advanced Micro Devices (AMD) reported falling profit margins during the third quarter, sparking investor fears Oct. 19 that the computer chip maker faces pricing setbacks in its battle with archrival Intel's (INTC).

Sunnyvale (Calif.)-based AMD, the No. 2 chipmaker, said late Oct. 18 that its net income during the three month period ended Oct. 1 amounted to 27 cents per diluted share, compared to 18 cents per share during the same quarter last year.

But third quarter gross margin was 51.4%, compared to 56.8% in the second quarter of 2006 and 55.4% in the third quarter of 2005. The company blamed the decrease on lower prices for computer desktop processors.