AMD Reports Second Quarter Results
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Company Reports Sales of $985 million, Earnings of $0.05 per Share, and Record PC Processor Unit Sales
SUNNYVALE, Calif.--(BUSINESS WIRE)--July 12, 2001--AMD today reported sales of $985,264,000 and net income of $17,352,000 for the quarter ended July 1, 2001. Net income amounted to $0.05 per diluted share, on 341 million fully diluted shares outstanding.
Total sales declined by approximately 16 percent, and on continuing businesses, by approximately 11 percent from the second quarter of 2000. Results for the second quarter of 2000 included approximately $63 million in sales from the company's voice communications business, which was sold on August 4, 2000.
Sales declined by approximately 17 percent from the first quarter of 2001, when AMD reported sales of $1,188,747,000 and net income of $124,837,000, or $0.37 per diluted share.
For the first six months of 2001, AMD reported total sales of $2,174,011,000 and net income of $142,189,000, or $0.43 per diluted share. For the first six months of 2000, AMD reported sales of $2,262,466,000 and net income of $396,491,000, or $1.17 per diluted share.
AMD had record unit sales of more than 7.7 million PC processors during the quarter. Unit sales of seventh-generation AMD Athlon(TM) and AMD Duron(TM) processors were both at record levels. Average selling prices (ASPs) for PC processors declined sharply from the first quarter in the face of very aggressive pricing in a weak PC market.
Sales of AMD memory products declined by 13 percent from the second quarter of 2000 and by 23 percent sequentially in a continuing weak demand environment.
``In what proved to be a more challenging semiconductor business environment than anticipated, we believe we gained market share in our two principal product lines, flash memory devices and PC processors,'' said W.J. Sanders III, chairman and chief executive officer.
``Demand for flash memory products continued to reflect severe weakness in the communications and networking sectors,'' Sanders continued. ``The superiority of AMD flash memory products coupled with supply agreements with more than two-dozen leading OEMs have mitigated the impact on AMD of a severe downturn in the flash memory market. We believe we have gained market share in the flash memory arena in the first half of 2001.
``In a weak PC market, we experienced strong demand for AMD Athlon and AMD Duron processors. Continuing the steepest ramp of any AMD processor family, unit sales of our seventh-generation PC processors grew 16 percent sequentially. The strength and breadth of our PC processor products and the superior performance and value proposition of AMD Athlon and AMD Duron processors enabled AMD to achieve record PC processor unit sales. While responding to aggressive competitive pricing depressed our revenues and earnings, we believe we continued to gain unit market share in the PC processor market during the quarter. PC processor revenues declined 11 percent sequentially, but grew nominally over the second quarter of 2000,'' said Sanders.
Other developments
AMD expanded its PC processor portfolio during the second quarter with the introduction of the AMD Athlon 4 processor for mobile PCs and the AMD Athlon MP(TM) and companion AMD 760 MP(TM) chipset for workstation and server applications.
AMD introduced higher-performance AMD Duron and AMD Athlon processors. The 950-megahertz AMD Duron processor is the industry's highest-performance processor for the value segment of the PC market, and the 1.4-gigahertz AMD Athlon processor offers more delivered performance than any other PC processor.
AMD announced a breakthrough in flash memory cell architecture, known as Mirror Bit(TM) architecture that enables a flash memory device to store twice as much data as a standard flash memory device while maintaining complete pin and software compatibility without compromising AMD's industry-leading endurance of one million read-write cycles.
AMD retired $517 million of 6 percent convertible debentures.
The company's Fab 30 in Dresden, Germany was named ``Fab of the Year'' by the prestigious industry publication Semiconductor International, the third time an AMD facility has claimed this honor.
NEC Corporation (NEC Japan), Microsoft Co., Ltd. (Microsoft Japan), and ASCII Network Technology Inc. introduced a jointly developed streaming content server powered by the 1.33-GHz AMD Athlon processor that is targeted at commercial applications.
AMD continued to gain support for its HyperTransport(TM) technology, enhancing its position as an industry standard. With a peak data rate of 6.4 gigabytes per second, HyperTransport technology moves information faster within PCs, networking systems, and communications devices. More than 100 companies now support HyperTransport technology.
Current Outlook
The company's outlook statements are based on current expectations. The following statements are forward-looking, and actual results could differ materially. The company's current outlook is based on the following projections.
Demand for flash memory products continues to be weak, driven primarily by the continued severe weakness in the communications and networking sectors. Visibility in this product segment is poor, and the company projects a sequential decline in sales for the third quarter.
PC industry unit growth for 2001 is less than previously forecasted, and the company now believes that industry unit shipments will be approximately flat for the year. Based on a normal seasonal pattern, which would show a pick-up in market demand for PCs in the third quarter, the company expects that unit sales of its AMD PC processors in the current quarter will again be at record levels with ASPs under continuing pressure.
Weakness in the communications and networking sectors continues to impact the company's foundry services and other IC products, and the company projects that these revenues will continue to decline in the third quarter.
If current conditions prevail, the company expects that overall revenues could decline in the range of 10 to 15 percent in the current quarter. With a decline in sales of this magnitude, the company would report an operating loss.
Normal seasonality coupled with a recovery in some of the markets for flash memory products should enable the company to increase revenues and return to solid profitability in the fourth quarter. |
