AMD issues earnings warning

Computer processor maker Advanced Micro Devices Inc. said Thursday that it wouldn’t return to profitability until the second half of next year and delayed the full release of the product it said would enable the company to recover.

“We have gone through a very difficult time, reacted quickly and decisively, and we are on our way to really have, I believe, a phenomenal transition year in 2008,” Chief Executive Hector Ruiz said at an analyst conference in New York.

AMD is committed to breaking even in the second quarter and returning to profitability in the third, Ruiz said.

In response, investors sent AMD’s shares to their lowest level since August 2003. The stock closed at $8.84, down 13 cents, but had traded as low as $8.42.

Chief Operating Officer Dirk Meyer said AMD had “done a lot of things very well,” but “we have done one thing very poorly. Namely, we haven’t delivered our quad-core product.”

AMD’s Barcelona quad-core server chip, which features four computing engines on a chip, is a key part of its race against larger rival Intel Corp. Barcelona was launched in September, but technical glitches have prevented the company from making it available in bulk.