3Q Earnings:
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AMD REPORTS THIRD QUARTER RESULTS
Financial Statements
AMD Selected Corporate Data
SUNNYVALE, CA--OCTOBER 6, 1999--AMD today reported sales of $662,192,000 and a net loss of $105,545,000, or $0.72 per share, for the third quarter, ended September 26, 1999.
Led by increased sales of AMD Athlon™ processors and flash memory products, sales increased by 11 percent from the immediate-prior quarter, while declining by 3 percent from the third quarter of 1998. Results from the immediate-prior quarter and the third quarter of 1998 include sales of Vantis Corporation, the AMD programmable logic subsidiary that was sold during the second quarter of 1999. Sales for AMD continuing product groups - the Computation Products Group, Communications Group, and Memory Group - were up 16 percent from the immediate-prior quarter, while up 1 percent from the third quarter of 1998.
In the immediate-prior quarter, AMD reported sales of $595,109,000 and net income of $79,896,000, or $0.53 per diluted share. The company's second-quarter results reflected an operating loss of $172,542,000, a one-time after-tax gain of $259,236,000 from the sale of the Vantis, and restructuring and other special charges of $17,514,000. Excluding the one-time gain and the restructuring and other special charges, results would have been a net loss of $161,826,000, or $1.10 per share for the quarter ended June 27, 1999.
In the third quarter of 1998, AMD reported sales of $685,927,000, which resulted in net income of $1,006,000, or $0.01 per diluted share.
For the first nine months of 1999, AMD reported total sales of $1,888,894,000, which resulted in a net loss of $154,016,000, or $1.05 per share. In the first nine months of 1998, AMD reported total sales of $1,753,321,000, and a net loss of $126,281,000, or $0.88 per share.
"Sharply higher sales of flash memories and sales of AMD Athlon processors at higher margins than those experienced on AMD-K6® family processors combined to boost revenues smartly and cut our operating loss by more than $70 million compared to the immediate-prior quarter," said W.J. Sanders III, chairman and chief executive officer.
"Flash memory sales grew by 28 percent over the immediate-prior quarter. Flash memory demand is very strong and continues to outstrip our ability to supply, even as we increase production capacity.
"Unit sales of Microsoft® Windows® compatible processors grew by more than 20 percent over the immediate-prior quarter to more than 4.5 million units," Sanders continued.
"Limited AMD Athlon motherboard availability during the third quarter was exacerbated by the Taiwan earthquake on September 21, which shut off motherboard shipments in the final week of our quarter. In spite of this, unit sales of AMD Athlon processors attained the hundreds of thousands level.
"Demand for AMD Athlon processors from both our OEM customers and end-users has been very strong. Technical reviews have been outstanding, reflecting the clear superiority of the AMD Athlon processor over the Intel Pentium III processor on all important and relevant benchmarks. With this week's introduction of the 700-MHz AMD Athlon processor, AMD continues to set the performance standard for Microsoft Windows PCs.
"Our operational performance last quarter was excellent. Accordingly, we are highly confident that we can produce more than one million AMD Athlon processors in the current quarter. In the face of strong demand, unit sales are expected to be gated by infrastructure support limitations resulting from the continuing effects of the Taiwan earthquake. The most critical items are the motherboards themselves and the components that populate them. Based on all of the currently available information, we believe we still have a good chance of achieving our pre-earthquake goal of cumulative sales of one million AMD Athlon processors by year-end," Sanders concluded.
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 "plans," "expects," "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 third parties may not provide infrastructure solutions to support the AMD Athlon processor in a timely manner to allow the company to meet its unit sales goals, that infrastructure support limitations resulting from the continuing effects of the Taiwan earthquake will worsen, that the company will not be able to produce the AMD Athlon processor in the volume necessary to meet its goals, that the AMD Athlon will not achieve customer and market acceptance; and, that demand for flash memory products will not continue at current or greater levels. We urge investors to review in detail the risks and uncertainties in the company's Securities and Exchange Commission filings.
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