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

To: Scot who wrote (104779)	4/12/2000 9:23:00 PM
From: Scot	Read Replies (1) \| Respond to of 1576825

from CNNFN: AMD shreds 1Q estimates Chip maker credits strong sales of Athlon processors, flash memory By Staff Writer Richard Richtmyer April 12, 2000: 8:10 p.m. ET NEW YORK (CNNfn) - Advanced Micro Devices on Wednesday reported a first-quarter profit that blew past expectations, which executives attributed to strong sales growth across all of the computer-chip maker's product lines. And executives at AMD (AMD: Research, Estimates) in Sunnyvale, Calif., said they see strong growth throughout the rest of the year. For the quarter ended April 2, AMD said it earned $189.3 million, or $1.15 per share, nearly double the 58 cents-per-share profit analysts polled by earnings tracker First Call had expected from the Sunnyvale, Calif.-based company. Sales for the quarter were $1.09 billion, which is up 73 percent from last year's first quarter, and up 13 percent sequentially. The fourth quarter is typically stronger for semiconductor companies because of an increase in sales of PCs during the holiday season. "AMD had the best quarter in its history," said W.J. Sanders III, AMD's chairman and chief executive, in a conference call with analysts Wednesday. The quarter's better-than-expected revenue did not come as a surprise. AMD told investors last week that the company was on track to post record sales. The most recent quarter was the second in a row during which AMD blew past earnings expectations. During the fourth quarter, the company posted net income of 43 cents per share, while analysts had been expecting the company to earn just a penny per share. AMD shares ended Wednesday's session down 6-1/8, or 8.7 percent, at 64-1/2, amid a broader sell-off in chip stocks, which dragged the Philadelphia Stock Exchange's semiconductor index 8.3 percent lower to 1,037.7. In after-hours trade on MarketXT, AMD shares were quoted at 80.

To: Scot who wrote (104779)	4/12/2000 11:19:00 PM
From: Joe NYC	Read Replies (2) \| Respond to of 1576825

Scot, Although AMD appeared to perform quite well, some analysts believe that challenges lay ahead. For one, AMD has yet to depreciate the costs of its Dresden manufacturing plant. That should bring down the income figures, said Ashok Kumar, analyst at Piper Jaffray. This guy is really something. Well AssOk, change your rating to sell then!. Joe

To: Scot who wrote (104779)	4/12/2000 11:26:00 PM
From: Yougang Xiao	Read Replies (2) \| Respond to of 1576825

WSJ on Q1: AMD Emphatically Reverses Loss With Profit Surge in First Quarter By KHANH T.L. TRAN Staff Reporter of THE WALL STREET JOURNAL Advanced Micro Devices Inc. reported first-quarter profit that was twice what Wall Street expected, driven by strong demand for its Athlon microprocessors and lower costs that helped swell gross profit margins. The Sunnyvale, Calif., company also told analysts it expects increasing demand for its personal-computer chips in the second quarter. AMD's upbeat outlook contrasts sharply with fears of a PC market slowdown that rocked the stock market Wednesday -- and shares in Hewlett-Packard Co., International Business Machines Corp. and Microsoft Corp. in particular -- and could help restore a measure of confidence in some technology stocks. "We think the PC market is strong and it's getting stronger," said W.J. "Jerry" Sanders, AMD's chief executive officer, in a conference call following the earnings release. AMD reported net income in the first quarter of $189.3 million, or $1.15 a diluted share, reversing a year-earlier loss of $128.4 million, or 88 cents a share. Analysts surveyed by First Call/Thomson Financial were expecting the company to earn 58 cents a share, a consensus that was revised upward last week based on AMD's projection that revenue would be better than expected. Revenue surged to $1.09 billion from $631.6 million a year earlier, as the company shipped 1.2 million units of its Athlon chips, double the number shipped during the fourth quarter. The company said that it sold a total of about 6.5 million PC chips in the first quarter. Its profit margins increased to about 45% from 40% in the fourth quarter. Some analysts said they were expecting margins of 39% to 40%. The results were released after regular New York Stock Exchange composite trading ended at 4 p.m. Wednesday, at which time shares of AMD were at $64.50, down $3.50. In after-hours trading following the announcement, AMD's shares surged to $76. Mr. Sanders, calling the quarter the best in the company's history, said it "was a great start to the new millennium at AMD ... Athlon is clearly a home run." AMD, usually a distant No. 2 to Intel Corp. in the microprocessor business, has lately been challenging the leader for the speed crown. For that reason, AMD has been able to sell more-expensive chips that boast higher profit margins, rather than reducing prices to entice customers. The higher mix of high-end products was one major factor in the earnings surprise. The first quarter is usually a relatively slow period for PC sales. But in the most-recent period, analysts said, the market benefited from a healthy economic environment, increasing efforts to build high-speed Internet networks and growing demand for new consumer electronics such as handheld organizers and cellular phones. Jonathan Joseph, an analyst at Salomon Smith Barney in San Francisco, said it is "very encouraging" that AMD expects to increase output of its PC processors in the second quarter. And while there may not be blow-out demand for personal computers, sales are still stronger than expected, he said. AMD said it anticipates to ship about the same number of PC chips in the second quarter and that the number of Athlon processors will increase to 1.8 million units. AMD saw its market share rise to 17% from 16.6% in the fourth quarter, according to Mercury Research Inc. Intel also edged up with first-quarter market share of 82.1% from 82% in the fourth quarter. AMD said its average selling prices for the Athlon chips and its K6-chip family rose to more than $90 in the first quarter from about $80 in the fourth quarter. "In the short term, they have executed well," said Ashok Kumar, an analyst at U.S. Bancorp Piper Jaffray in Menlo Park, Calif. But he cautioned: "The competition with Intel will step up to a much higher plane." Mr. Kumar predicted that Intel will gain market share in the low-end chip sector with its new Celeron processor, which will cost about the same as the chips in AMD's K6 and K6-2 families. He said he expects AMD to counter the new Celeron with a low-cost version of its Athlon chip dubbed Spitfire. But because the Spitfire would cost more than the Celeron to produce, AMD may have difficulties in responding to price cuts from Intel, Mr. Kumar said. In response, AMD asserted that the Spitfire would be cost-effective and competitive with the Celeron while showing high performance. While most of the company's profit surprise came from operations, about 12 cents a share of its profit came from non-operating income, including sale of some property in Ireland. AMD also paid no tax in the period, because it was able to carry forward benefits from previous losses.