AMD Profit Margins Skid During Price War with Intel

Excerpt from our Wall Street Breakfast, a one-page summary of this morning's key market-moving and stock-moving stories:

A.M.D. Posts Higher Profit, but Price War Hits Margins [New York Times]

Summary: Advanced Micro Devices, bruised from a price war with rival semiconductor manufacturer Intel, posted a steep decline in profit margins yesterday. Though the Q3 $134.5 million net profit exceeded expectations, margins tumbled to 51.4% from 56.8% in Q2. Concerns over margins overshadowed AMD's 77% earnings leap over last year (a product of the company's success with its notebook processors) and sent the shares tumbling 12.3% in after-hours trading.
Related links: AMD Gross Margins Suffer from "Precipitous Decline" in Desktop ASPs • Intel's Q3 Profits Suffer From Price War with AMD • AMD Q3 2006 Earnings Call Transcript • AMD Earns 27 Cents Per Share in 3Q [Newsday]
Potentially impacted stocks and ETFs: Advanced Micro Devices (AMD), Intel (INTC) • iShares Goldman Sachs Semiconductor Index Fund (IGW)

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