AMD (NYSE: AMD) said things did not go its way in Q1. No one should be surprised. AMD has not had a good quarter in over two year. How CEO Hector Ruiz keeps his job is still the equivalent of a state secret.

AMD said that that it expects revenue for the first quarter ended March 29, 2008 to be approximately $1.5 billion, a 22 percent increase compared to the first quarter of 2007, and down 15 percent compared to the fourth quarter of 2007. The decrease is due to lower than expected sales in each and every one of its businesses.

Sometime between brushing his comb-over and flossing his teeth yesterday morning, Ruiz decided to fire 10% of the poor souls who work for him.

The company has set a new standard for heinous corporate behavior. But, AMD may not be around, at least not as an independent company, for very long. If it posts a couple of more weak quarters, the $5 billion of debt, most of it taken on when the firm bought graphics chip company ATI, will sink the operation. Debt service is always hard to make when a company has negative cash flow.

AMD is up against larger rival Intel (INTC), but it is also fighting a PC market which has started to grow very slowly because the economy is off. There is no rising tide to save AMD, and Intel has pummeled it with new chips for servers and PCs.  AMD has almost no good options. It has already made several sets of employee lay-offs. There is bound to be a limit to that. So, the company may face selling itself or heading to a major reorganization later in 2008.

All of the planned firings sent the stock down after hours yesterday. Shares trade at $6.34, down from over $35 two years ago.

Douglas A. McIntyre

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