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05:25pm EDT 23-Jun-99 Corporate Release (Toni Beckham 408/749-3127) AMD
AMD ANNOUNCES PRELIMINARY SECOND-QUARTER RESULTS
SUNNYVALE, Calif.--AMD today announced that it will report an
operating loss in the range of $200 million for the quarter ending
June 27, 1999, due to a sharp decline in average selling prices for
its AMD-K6(R) processor family and lower unit shipments.
Despite substantially higher production of AMD-K6 family
processors with excellent yields and a richer mix of
higher-clock-speed devices, the company expects that average selling
prices and unit shipments will fall substantially below earlier
expectations for the second quarter.
The company expects to produce more than 6 million AMD-K6 family
processors of which more than 50 percent will be devices with clock
speeds of 400, 450, 475, and 500 megahertz.
It is unlikely that AMD will record sales of more than 3.7
million units. A significant amount of AMD sales are "turns" made
through distribution, particularly in Asia. Heavy gray market activity
worldwide, which has only recently subsided, makes it unlikely that
the company will get the sell-through needed to achieve unit sales
growth.
The company was unable to retake market share at those customers
whose needs AMD did not satisfy during the production-limited first
quarter when shipments were prioritized to AMD strategic partners.
There were pricing pressures in the market as a result of very
aggressive pricing on Celeron processors from Intel. These pressures
were exacerbated by the liquidation of processors from Cyrix as it
exits the market.
"We currently expect total revenues for the quarter will be less
than $600 million," said W.J. Sanders III, AMD chairman and chief
executive officer. "Non-processor revenues should grow by more than 10
percent over the immediate-prior quarter. With Microsoft(R) Windows(R)
microprocessor revenues of approximately $250 million, including
several million dollars of revenues from initial production shipments
of the AMD-K7 processor, we could record an operating loss in the
$200-million range. While this will be offset by the more than $400
million pretax gain on the recently concluded sale of Vantis, our
programmable logic subsidiary, these operating results are a bitter
disappointment to all AMDers who have performed so heroically to
introduce the world's fastest x86 processor, the AMD Athlon(tm) 600
processor (formerly code-named K7) while achieving record yields,
production levels, and performance on AMD-K6 family processors,"
Sanders concluded.
About AMD
AMD is a global supplier of integrated circuits for the personal
and networked computer and communications markets. AMD produces
Microsoft(R) Windows(R) compatible microprocessors, flash memories,
and integrated circuits for communications and networking
applications. Founded in 1969 and based in Sunnyvale, Calif., AMD had
revenues of $2.5 billion in 1998. (NYSE:AMD).
Cautionary statement
This release contains forward-looking statements, which are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are
generally preceded by words such as "expects," "plans," "believes,"
"anticipates," or "intends." Investors are cautioned that all
forward-looking statements in this release involve risks and
uncertainty that could cause actual results to differ materially from
current expectations. Forward-looking statements in this release
involve the risk that the company will not achieve its processor
production and unit shipment goals and anticipated financial
performance in the second quarter. We urge investors to review in
detail the risks and uncertainties detailed in the company's
Securities and Exchange Commission filings, including the most
recently filed Form-10K.
Note to Editors: AMD, the AMD logo, K6, AMD Athlon and
combinations thereof are trademarks and AMD-K6 is a registered
trademark of Advanced Micro Devices, Inc. Microsoft and Windows are
registered trademarks of Microsoft Corporation.
First Call Corporation - all rights reserved. 617/345-2100
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