UBS Warburg downgraded Advanced Micro Devices (AMD) to reduce from hold.
Analyst Thomas Thornhill says the chipmaker's second quarter loss is substantially larger than his $0.37 loss estimate. He says a significant decline in processor average selling prices (ASPs), and losses on returned processors impacted sales and margins.
Thornhill says he thinks the company's return to profitability hinges on the successful introduction of its Hammer family; until then, he sees signifcant earnings and market share losses, lower ASPs and material cash burn rate.
He widened the $0.93 2003 loss estimate to a $1.50 loss, and cut the $0.49 2003 loss to a $1.22 loss. He also cut the $9 target to $7.