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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Mani1 who wrote (88377)	1/19/2000 9:41:00 PM
From: Y. Samuel Arai	Respond to of 1578930

AMD Posts Strong 4Q On Better-Than-Expected PC Demand By MARK BOSLET PALO ALTO, Calif. -- Advanced Micro Devices Inc. (AMD) posted strong fourth-quarter results as Christmas-season PC sales boosted demand for its processors. The Sunnyvale, Calif., company also gave a relatively upbeat outlook for coming quarters as it anticipated its more powerful processors would command better prices in the market. For its fourth quarter, AMD said sales grew 23% from last year and 46% from the third quarter to $968.7 million. Sales in the year-ago quarter were $788.8 million. Fourth-quarter net income came to $65 million, or 43 cents a diluted share, the company's first profit in a year. In the fourth quarter of 1998, the company had net income of $22.3 million, or 15 cents a share. Analysts said they expected AMD shares to climb sharply in trading Thursday. The company has become a more effective competitor to Intel Corp. (INTC), as witnessed by its record fourth-quarter market share of 17%. It also has overcome manufacturing problems that limited its chip production last year. AMD said it made 1 million of its Athlon chips in the fourth quarter, shipped 900,000 and sold more than 800,000 through distributors to customers. It also had a better yield of high-performance chips, which lifted average selling prices to about $80 in the quarter from $65 in the third quarter. Including its older K6-2 line of chips, total processor shipments for the quarter rose 35% to 6 million. AMD said its communications and memory businesses also turned in strong quarters, with product such as its flash memory chips seeing strong demand. It was a "spectacular" quarter, said SG Cowen & Co. analyst Drew Peck. Still, some industry watchers questioned what Intel's response would be to a more threatening AMD. Over the past year, Intel has battled AMD by cutting prices. Additional price-cutting could come over the next several quarters, Peck said. AMD Chief Executive and Chairman W.J. Sanders III said he expected first-quarter revenue to be up dramatically year over year, but flat to slightly down from the fourth quarter due to a seasonal slowing in PC purchases. That means a modest decline in the number of chips sold compared with the fourth quarter as well, he said. But an increase in the production of higher performance chips could lead to a "somewhat higher" average selling price, he said. He added that the company's goal continues to be a 30% share of the computer market by 2001. Included in the goal is a production target of 25 million chips in 2000 and expectations that a $100 average selling price could be reached during the year, he said. -By Mark Boslet; Dow Jones Newswires; 650 496-1366