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

To: AK2004 who wrote (13422)	10/12/2000 1:29:02 PM
From: Maverick	Respond to of 275872

AMD's concentration on consumer mkt avoids slowdown in Euro that modestly affected biz machines AMD has strong quarter BY THERESE POLETTI mercurycenter.com Mercury News Advanced Micro Devices Inc. reported a near-doubling of revenues and sharp gains in profits for the third quarter, fueled by strong sales of its flagship Athlon processors and flash memory. AMD's strong performance, which topped analysts' expectations, comes despite recent warnings from rival Intel Corp. that its own revenues for the same three-month period will be disappointing. Looking forward to the current quarter, AMD said it expects to face limits on how many of its lowest-cost Duron processors it can sell because of a lack of matching chip sets. Although the chips could be sold without the chip sets, AMD said it would have to cut prices. ``Rather than taking those prices down too far, there will be a limit on how many Durons we can sell,'' said AMD's chairman and chief executive, W.J. (Jerry) Sanders III. For the third quarter, AMD reported sales of $1.21 billion, up 82 percent from sales of $662 million in the year-ago quarter. Net income was $219.3 million, or 64 cents a share, excluding charges and gains, versus a net loss of $105.5 million a year ago, or a loss of 36 cents a share. Analysts were expecting AMD to report earnings per share of 62 cents, excluding one-time items, according to First Call/Thomson Financial, which tracks Wall Street estimates. Sunnyvale-based AMD also said that it was not witnessing any kind of slowdown in Europe, which Santa Clara-based Intel cited for its own weak results. However, AMD also noted that its business in Europe is supplying chips for consumer PCs, not business PCs. ``Our business in Europe looks fine in the third quarter,'' said Sanders. ``There was a sluggish demand in Europe in the business sector, but in the consumer sector, business was pretty good.'' In the U.S., there was a slowdown in the low end of the PC market, but Sanders noted that AMD didn't have a big presence in cheap PCs this quarter because of the constraints on the Duron processor. ``I think the weakness impacted Intel and Emachines and those kind of the guys,'' Sanders said. Emachines is a leading maker of sub-$500 PCs, and Intel is its main chip supplier. In the third quarter, amid a PC market that was tougher than anticipated, AMD said it doubled sales of its Athlon and Duron chips from the second quarter, to surpass 3.6 million units. For the year, AMD said that it now expects that it will sell a total of about 28 million units, up from its prior forecast of 25 million units. In 1999, AMD sold 18.8 million units. Analysts and investors welcomed the AMD earnings news. ``It was a little bit refreshing to hear some positive views on the overall space,'' said Dan Scovel, an analyst at Needham & Co. ``But it's hardly definitive. Their market share exposure is hardly the biggest.'' Indeed, AMD said that it estimated that its market share grew to 17.5 percent, up from about 16 percent in the prior quarter. Exact market share data depends on what Intel reports in total unit shipments when it reports its earnings next Tuesday. Also in the quarter, AMD said it reported a one-time gain of $336.9 milion, resulting from the sale of its voice communications business, called Legerity. The company also had charges of $23 million, relating to the retirement of senior secured notes. AMD reported its earnings after the market closed Wednesday, but in after-hours trading, shares surged TKTK. In regular trading, AMD shares added 75 cents to close at $23.50.