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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: niceguy767 who wrote (1608)	7/20/2000 1:51:35 PM
From: Mani1	Read Replies (1) \| Respond to of 275872

I think the tax rate issue should be well known to all, here is another article which tries to stress the point. computerwire.com AMD Posts Stellar Q2 Amid Relentless Chip Demand By Stephen Phillips Number two chipmaker AMD Corp reported a 38% surge in quarterly operational income for its latest trading period, even as increased sales forced it to surrender 20% of revenue to the taxman versus zero in the preceding quarter. Executives highlighted 118% and 106% yearly growth in sales from flash memory products and microprocessors respectively for the second quarter ended June 30 as the Sunnyvale, California-based firm marched past the consensus of financial analysts' earnings forecasts for the second consecutive quarter. AMD pointed out that excluding the unexpected 20% tax burden it beat financial analysts' earnings per share estimates - predicated on a zero tax rate - by a handsome $0.37 margin. On an untaxed basis second-quarter earnings at $1.51 per share, topped the first quarter by $0.31. The firm had tipped off Wall Street months ago that soaring sales would present it with a tax bill for the first time in many quarters, but with the exact incidence unclear until earnings were collated analysts stuck to original untaxed projections. Including tax, AMD's second-quarter profit stood at $207m or $1.21 per share, dramatically turning around losses totaling $113m or $0.81 per share in the corresponding 1999 quarter. The firm was still in the red in the third quarter ended September 30 last year highlighting the sudden traction of the boom currently gripping the chip market. On AMD's earnings conference call executives bandied about the magic $1bn annual income figure, which they now believe is comfortably achievable for the fiscal year as PC OEMs stock up to meet holiday season retail demand in the firm's typically-stronger second half. Sales came in at $1.17bn, almost double $595.1m in the year-ago quarter and up 8% on the preceding quarter's figure of $1.09bn. AMD said its share of its core consumer PC market was above 50% for May, the most-recent period for which statistics are available but did not provide comparative figures. The firm said it shifted 1.8 million units of its K-7 consumer PC processor - the successor to the K6-2 family - in the quarter, higher than expected in what is typically its slackest trading period. In AMD's flash memory business, executives said cell phone manufacturers drove second-quarter sales. The firm said the average density of units shipped during the quarter increased to 8.8 Megabytes from 6.6 in the year-ago quarter reflecting the increased memory capacity demands of more-sophisticated, software-enabled handsets. The proliferation of internet-enabled appliances and digital set-top boxes also underpinned flash memory. Executives also cited a doubling in shipments of ADSL communications chips for high-speed networking, albeit from a low year-ago level AMD said previously-announced production ramp schedules for the Mustang high-end workstations and server processor - the firm's debut product in the enterprise market - remained on course. The 64-bit architecture Sledgehammer processor remains on track to begin volume shipments from late 2001. Like number one-ranked rival Intel Corp, which reported its second-quarter earnings on Tuesday, AMD couldn't ship orders fast enough. Executives said the firm is completely sold out of stocks of K6-2 and Duron processors and flash memory units, while it does not expect to fulfill all current bookings until the end-of- the-year quarter. The firm took great pains during yesterday's earnings conference call to stress the continuing robustness of chip demand. Executives said one- to three-year supply deals with customers provided a long-term window on future market conditions and suggested no fall off in current levels of demand during that time. "There is not a shred of evidence of any loosening in demand on any of our products," chief operating officer and president Hector De J Ruiz told conference call listeners. Across its product range, AMD commanded an average selling price, or ASP, in the low-$90s per processor during the quarter, up from the high $80s in the preceding quarter. This is key metric for chip market watchers because it sheds light on the balance of demand and supply. Rising ASPs denote excess demand. AMD is eying an ASP across its product range topping $100 by year's end. This will be helped by an expected higher proportion of more-expensive Duron and Athlon sales at the expense of the old-generation K6-2 processors. The firm said it is aggressively investing in increasing production capacity at existing fabrication plants and adding new facilities to keep pace with demand. Meanwhile it expects operational costs to spike in the current, third quarter reflecting increased merchandising expenses to promote new product lines.