Faced with a lackluster voter turnout, Advanced Micro Devices announced Tuesday it is extending the deadline for its shareholders to vote on the proposed spin-off of its manufacturing business.
AMD, which in October announced plans to spin off its manufacturing operations, failed to get a quorum of its shareholders to vote on the issue. As a result, the deadline for casting votes has been extended to February 18. A majority of the shares is required to vote to establish a quorum.
The chipmaker reported that as of Tuesday, 42 percent of the eligible shares had been cast. Of this group, 97 percent are in favor of issuing the additional shares and warrants needed to spin off its manufacturing unit.
(Credit:
Yahoo Finance)
Under the proposal, AMD would become a chip-designing company and spin its manufacturing operations off to a new entity tentatively called The Foundry Company.
AMD would own 34.2 percent of the new manufacturing company, while the Advanced Technology Investment Co. would own the rest. ATIC is an investment company wholly owned by the government of Abu Dhabi, which is part of the United Arab Emirates.
Abu Dhabi has been invested in AMD since late 2007 when Mubadala Development Co., whose sole shareholder is the Abu Dhabi government, poured $622 million intol the chipmaker.
For AMD, the sooner it can spin off its manufacturing business, the sooner it will be free of the capital-intensive side of its business.
The chipmaker unpleasantly surprised Wall Street last month when it reported a $1.4 billion loss in the fourth quarter and a 33 percent year-over-year drop in revenue. The outlook for 2009 is not looking much better.The company noted that the current macroeconomic conditions provide little visibility into its business and that the continued corrections in its supply chain lead it to believe that first-quarter revenue will fall below that of the fourth quarter.
Updated to add reference to analyst downgrade.
Intel issued a fourth-quarter warning on Wednesday, noting its financial performance will be less than previously forecast and comes a day after downgrades by analysts.
The chip giant is scaling back its forecast as its revenues come in "significantly weaker" than expected across all its market segments and the countries that it operates in. Gross margins, as a result, also received a revised outlook.
Intel, which released its quarterly warning after the markets close, saw its shares drop 7.47 percent in after hours trading. During the regular trading session Wednesday, Intel had ended the day at $13.93 a share, down 2.94 percent.
Intel lowered its fourth-quarter revenue outlook to between $8.7 billion and $9.3 billion, compared with its previous guidance of $10.1 billion to $10.9 billion.
And its fourth-quarter gross margins are anticipated to come in around 55 percent, versus its earlier forecast of approximately 59 percent.
In a cost-cutting move, Intel also said it plans to reduce its research and development spending and its general administrative costs to $2.8 billion in the quarter, versus a slightly higher $2.9 billion. Overall spending for the year is expected to come in at $11.4 billion, compared with its previous forecast of $11.5 billion.
Intel said those are the only unexpected changes it expects at this time.
One analyst, Craig Berger of Friedman Billings Ramsey, was ahead of the game, putting out a research note Tuesday that cut Intel's revenue forecast to $9.8 billion from $10.4 billion.
Wall Street is expected to take another slice at Intel's earnings, now that the chipmaker has issued a revised lower forecast. Intel said it expects to report its fourth-quarter results on January 15.
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