Advanced Micro 3rd-qtr profits better than forecast
(Adds background, details from conference call)
SAN FRANCISCO, Oct 11 (Reuters) - Advanced Micro Devices
Inc. <AMD.N>, Intel Corp.'s main rival in the microprocessor
market, reported third-quarter results that topped expectations
on strong sales of its Athlon and Duron chips.
The Sunnyvale, Calif.-based company said that for the
period ended Oct. 1, it had net income before gains of $219.3
million, or 64 cents a share, compared with an operating loss
of $99 million or 36 cents a year ago. Sales nearly doubled to
$1.21 billion from $662.2 million.
AMD has been on a roll since it introduced its Athlon
processor, the first time it has ever had a chip that boasts
superior performance in some cases to Intel's chips. In light
of demand for its Athlon, AMD said it expects to sell out of
Athlons in the fourth quarter and expects to sell 28 million PC
processors in 2000 compared with earlier guidance of 25
million.
Unlike Intel, which last month said third-quarter revenue
would be 3 percent to 5 percent higher than those in the
second, roughly half the 9 percent to 12 percent analysts had
been expecting, AMD continues to barrel ahead.
"In a tougher market than anticipated, AMD achieved record
PC processor revenues on record unit sales, which were up more
than 50 percent year-on-year and 10 percent sequentially," said
AMD Chairman and CEO W.J. "Jerry" Sanders in a statement.
In the fourth quarter, AMD expects to sell 8 million to 9
million of its Athlon chips and its Duron chips, which are
aimed at the low-cost PC market and compete with Intel's
Celeron chips. It also forecasts annual 2000 sales of $4.8
billion compared with $2.9 billion in 1999.
The results topped average analyst expectations of 62 cents
a share, according to First Call/Thomson Financial.
Sales of flash memory chips, which keep their data when the
power supply is turned off, more doubled from a year ago, AMD
said. And it expects fourth-quarter sales of flash chips to be
limited only by AMD's inability to increase production, and
executives said on a conference call it would be "hard-pressed"
to meet demand.
AMD sold nearly 6.9 million units in the quarter and "we
gained market share," Sanders said on the call. "Duron demand
was also strong everywhere."
Shares of AMD fell 1/2 to close at $21-3/4, well off their
year high of $48-1/2, although up from a year low of $8-3/16.
The earnings report came after the close.
(( duncan.martell@reuters.com // (415) 677-2536 ))
REUTERS
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