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AMD's Q4 Bests Intel's--For Now

Intel and AMD have long been at each other's throats, both in the marketplace and, on occasion, in the courtroom. But their recently announced fourth-quarter earnings suggest the battle is fiercer than ever.

Advantage: AMD. Thanks to strong sales of PCs based on AMD dual-core, 64-bit processors by Acer and Hewlett-Packard, the company saw quarterly revenue jump 45 percent to $1.8 billion. On the flip side, Intel posted $10.2 billion, well off its forecast of $10.4 billion to $10.6 billion, with much more modest growth of 6 percent.

"AMD has touted that 64-bit systems are future-proof, and it was able to drive that message to the mainstream market," says Sam Bhavnani, an analyst at Current Analysis.

Meanwhile, Intel executives provided a mixed assessment of the company's performance in the final calendar quarter of 2005. On one hand, CEO Paul Otellini noted that Intel's performance amounted to the "best operating results in the company's history." Still, he conceded, the results failed to meet expectations.

Even worse, Intel expects growth to taper off this year--and not by just a little. For 2006, the world's largest chip maker is expecting sales growth of 6 percent to 9 percent, compared with last year's impressive growth of 13.5 percent, which brought the total to $38.8 billion. Should Intel come in at the lower end of its forecast for this year, growth would be less than half that of 2005.

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