14 DAY TRIAL // If you're not doing well, as a normal person would, you take a vacation, some prescription medicines, a day off from work, and more. But what happens when you are a multi-million dollar company with a reputation to respect and hundreds of employees and millions of customers? You can't exactly "take a day off", in the computer industry that would mean suicide. This is one of the most fought-over domains out there, I've heard a joke about this, it said something about a person leaving for an extended lunch break, and when coming back somebody was at his office, typing on the keyboard, saying "sorry (...) you took too long."
So what do you do if your name is Advanced Micro Devices and you're recovering from a $5.4 billion investment? First, you start to lay off some of the staff members, anybody who isn't essential just got marked as disposable. Then, you take the market by storm with very low prices, hoping that you would sell more products than the competition, thus allowing you a place on the market, without having to go bankrupt. You cut back on investments, any plans of you building a new factory of a manufacturing line, if they haven't already begun construction, can be postponed as well.
What else can you do? You launch a press release in which you mention expecting a "revenue of approximately $1.225 billion" for the first quarter of the year, before the actual time when you present the earnings report for that quarter. Why are you doing this? To give the investors a chance to take their share and leave, you tell the fish "I'm going to catch you" before you throw the bait into the water. This ahead-of-time warning is intended for us to see that AMD isn't doing so well, they may have caught a cold and don't want anybody else to get "infected" so they keep people away.
It's common sense that the repercussions from the deal they made last year were going to show up eventually, and this is AMD's way of saying "we're not doing well". Even though the actual figures might differ than what they announced, this being just an expected revenue, it's a fact that these revenues we are talking about have declined quarter-over-quarter "for the Computing Solutions segment" and AMD will reduce "2007 capital expenditures by approximately $500 million." Up until the point where they actually go bankrupt, I believe it to be some time as they haven't succumbed just yet, but it's what they will do in the next period of time and how the general public accepts their following line of products will decide their fate.