K6 ASP is > $100
Chip Maker Advanced Micro Posts A Surprise Profit, Cites K6 Sales
Dow Jones Online News, Tuesday, October 06, 1998 at 17:52
NEW YORK -(Dow Jones)- Chip maker Advanced Micro Devices Inc., which
has been trying to steal market share away from industry king Intel
Corp. in the low end of the personal computer market, Wednesday posted a
surprise profit for the third quarter.
Sunnyvale, Calif.-based AMD said net income came to $1 million, or
one cents a share on a fully diluted basis, compared with a loss of
$31.7 million, or 22 cents a diluted share, in the year-earlier period.
Revenue increased 15% to $685.9 million.
The mean estimate of 22 analysts surveyed by First Call was for a net
loss of around 12 cents per share. Charles Boucher, an analyst at
Donaldson Lufkin & Jenrette Securities Corp., was expecting AMD to
report a loss of five cents a share on sales of $680 million.
Not only is AMD selling more chips, but it is also getting more money
per chip as users migrate to higher-speed computers. AMD's average chip
price was north of $100 in the third quarter, an improvement from an
average of $86 a chip in the second quarter, Boucher said. AMD reported
strong growth in sales of of its flagship K6 line of microprocessors.
Sales rose by 1 million units to 3.8 million chips.
Amid a global semiconductor slump, the nation's chip makers have been
reporting dismal results. Evidence of the slump has been widespread, as
chip companies have idled plants, suspended plans for new factories and
laid off workers. The belt-tightening comes as the economic turmoil in
Asia and a chronic glut of memory chips continues to wreak havoc on the
industry.
If recent projections by Dataquest Inc. are on target, the industry
overall should see sales slip 6% this year. That would make 1998 only
the third year out of the last 20 that chip sales decreased.
But there was some good news in the third quarter. For one thing, PC
companies started building computers again, ending a painful six-month
inventory correction. This helped microprocessor makers, including
Intel, which surprised Wall Street last month by announcing that
computer chip sales would come in higher than expected. Many analysts
think the chip industry won't stage a meaningful comeback until the
middle of next year. |
