AMD profits from Opteron sales

Growing demand for its Opteron server chips pushed Advanced Micro Devices (AMD) to greater second quarter profits, but the company failed to meet financial analyst expectations.

AMD on Thursday reported a profit of US$89 million for the quarter, far above its mark of US$11 million last year.

Despite the profit, AMD's earnings of US$0.18 per share missed a forecast of US$0.22 per share on revenues of US$1.25 billion from analysts surveyed by Thomson Financial.

AMD posted US$1.22 billion in revenue for the quarter ending July 2, up from the US$797 million reported by the company's processor division last year. Including revenue from its Spansion flash memory unit, which was spun off in December 2005, AMD reported US$1.26 billion in the year-ago quarter.

Strong demand for AMD's Opteron server chip accounted for the 53 percent jump in revenue, AMD said.

Opteron chip sales alone rose 141 percent year over year, Chief Financial Officer Robert Rivet said in a conference call with investors.

"We are well on our way to meeting our goal of 30 percent year-end server market share," he said.

He doesn't have far to go. As of the first quarter of 2006, AMD had 22.9 percent share compared to Intel's 76.8 percent, comparing units sold of Opteron versus Xeon, said Shane Rau, an analyst at IDC. The remaining 0.3 percent belongs to IBM Corp.'s G5 processor.

"The market had been hungry for a second source for a long time. That alone gives you 10 percent, just for providing a product that competes on price. If you add strong performance and rich feature sets, then you can gain additional share, and I think that's what we're seeing with AMD," he said.

The low revenue came as no surprise to Wall Street, since AMD had warned on July 6 that it would come in about nine percent lower than its original revenue target. It blamed slow sales of its Athlon 64 X2 desktop chip and Turion 64 X2 notebook chip.

Those processors could face an even tougher challenge in the rest of 2006, since Intel plans to launch its new dual-core chips including the Conroe Core 2 Duo for desktops, on July 27, and Merom Core 2 Duo for laptops, due in early August.

Intel also tried to strike a blow against Opteron by launching the Woodcrest Xeon 5100 chip for servers in June. In return, AMD plans to launch its "Revision F" dual-core Opteron server chip in August.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Ben Ames

IDG News Service
Show Comments

Cool Tech

Bang and Olufsen Beosound Stage - Dolby Atmos Soundbar

Learn more >

Toys for Boys

Nakamichi Delta 100 3-Way Hi Fi Speaker System

Learn more >

Sony WF-1000XM3 Wireless Noise Cancelling Headphones

Learn more >

ASUS ROG, ACRONYM partner for Special Edition Zephyrus G14

Learn more >

Family Friendly

Mario Kart Live: Home Circuit for Nintendo Switch

Learn more >

Philips Sonicare Diamond Clean 9000 Toothbrush

Learn more >

Stocking Stuffer

Teac 7 inch Swivel Screen Portable DVD Player

Learn more >

SunnyBunny Snowflakes 20 LED Solar Powered Fairy String

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Tom Sellers

MSI P65

This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang

MSI GT76

It really doesn’t get more “gaming laptop” than this.

Jack Jeffries

MSI GS75

As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr

MSI PS63

The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?