In Business This Week: Headliner
Jerry Sanders: Chipping Away at Intel
Is this a peak experience? For 31 years, Jerry Sanders has led Advanced Micro Devices through a roller-coaster rivalry with Intel, gaining and losing ground to the chip giant in patent battles and in sales.
Now, Sanders is savoring unprecedented success. On Apr. 5, he said in Tokyo that AMD's first-quarter sales would hit a record of more than $1 billion, up 10% from the prior quarter, on strong sales of PCs. Analysts expect profits of $65 million; AMD's stock rose to an all-time high of 67 and a market value of $10 billion or more.
Sanders, 63, grew up poor in Chicago and aspired to be an actor before his face was rearranged in a college brawl. He switched to electronics and founded AMD in 1969. Now, less than two years from his planned retirement, he's riding high. "You've got to give him credit," says U.S. Bancorp Piper Jaffray analyst Ashok Kumar. But new twists lie ahead. The PC business is peaking, and Intel plans to unveil a sizzling new line of chips in the second half. For Sanders, the thrill ride is never over.By Andy Reinhardt in San Mateo, Calif.; Edited by Anne NewmanReturn to top
Building a Wireless Goliath
Finally, SBC Communications and BellSouth can compete with the big boys in wireless. The two combined their wireless units Apr. 5 into a sweeping domestic service that covers nearly 70% of the U.S. population and 16.2 million users.
Now the two Bells have the scope to put pressure on national players AT&T Wireless and Verizon Wireless, the newly formed Bell Atlantic-Vodafone AirTouch venture. The newcomer expects to make acquisitions before summer to expand its reach to such cities as Seattle and New York. The company, controlled 60% by SBC and 40% by BellSouth, will focus on wireless Internet services. Could it also go public, as AT&T Wireless and Verizon plan to do? "It certainly is a terrific option," says SBC Chief Edward Whitacre.Edited by Anne NewmanReturn to top
MetLife Goes the IPO Route
Undeterred by the week's gyrating markets, Metropolitan Life Insurance plowed ahead with its initial offering on Apr. 5, raising $4.6 billion in its conversion from mutual to stock ownership. It wasn't everything the giant insurer wanted--it initially planned to raise as much as $6.5 billion. But less is still more: Company officials were eager to rake in new capital to compete in today's deregulated financial-services landscape. Although MetLife will use some of its new capital to pay policyholders who opted for cash, it's better poised to pursue acquisitions.Edited by Anne NewmanReturn to top
Call It the Coke Challenge
When Douglas Daft succeeded the embattled Douglas Ivester as head of Coca-Cola last December, many analysts expected Daft to throttle back from the robust growth targets--7% or 8% a year in soda sales and 15% in profits--the company had enjoyed when communism was falling and Coke was building bottling plants as fast as it could in places like Russia and China. Now he has made clear that he's still gunning for the old targets. After spending his first four months reviewing operations and gaining confidence about Coke's ambitious marketing plans, Daft told analysts "we couldn't in all honesty" project lower growth in sales. Still, Wall Street remains skeptical: Coke's stock fell 9% on Apr. 5. Coke is "still a `show me' story," says Sanford C. Bernstein's William Pecoriello.Edited by Anne NewmanReturn to top