AMD turns profit following jump in chip sales

With microprocessor sales jumping 79 percent, AMD reported stronger-than-expected Q4 2005 results.

Intel's poor performance in the last three months of 2005 turned out to be good news for rival chipmaker Advanced Micro Devices Inc., (AMD) which on Wednesday reported better-than-expected financial results for the period. With sales of AMD's microprocessor division increasing nearly 80 percent from the previous year, the company reported revenue of US$1.84 billion.

AMD's fourth quarter 2005 revenue was up 45 percent year-over-year, and the company went from losing $30 million during Q4 2004 to reporting a profit of US$96 million, or US$0.24 per share, during this most recent quarter. Excluding US$110 million in costs related to the initial public offering of AMD's Spansion flash memory division, the company's profit was US$205 million or US$0.45 per share.

The revenue numbers were well ahead of Wall Street expectations. Analysts had expected revenue for the quarter to total US$1.67 billion, according to a survey of 29 analysts by Thomson.

Investors had been expecting good things from AMD. While Intel's (INTC) stock was down more than 11 percent Wednesday, closing at US$22.60, AMD (AMD) shares rose by nearly 4 percent on the day, closing at US$34.15, and continued to rise in after-hours trading following the announcement of AMD's results.

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Robert McMillan

IDG News Service
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