AMD's Q3 led by strong Opteron, Athlon 64 sales

Advanced Micro Devices' (AMD) third-quarter revenue has come in a little under the company's earlier predictions, but strong increases in sales of its 64-bit desktop and server processors have resulled in the company's fourth straight profitable quarter.

AMD reported $US1.24 billion in sales for the third quarter, in line with the updated guidance it provided earlier this week. The company had originally expected to exceed the $US1.26 billion in sales it recorded in the second quarter of this year, but weaker demand for its flash memory products hurt third-quarter sales, AMD said.

Still, Net sales improved by 30 per cent compared to the third quarter of 2003, the company said in a release. This was largely driven by a 34 per cent gain in sales within AMD's Computation Products Group, which makes its 64-bit Opteron and Athlon 64 processors.

Those processors now accounted for more than one-third of AMD's sales, the company said.

Third-quarter net income was $US44 million, up sharply from the $US31 million net loss AMD recorded in the third quarter of 2003. The strong sales growth in the processor division coupled with improved margins within AMD's flash memory business helped AMD record its highest profit in several quarters. Earnings per share were $US0.12, in line with analyst estimates.

Industry analysts were concerned about the PC market heading into the fourth-quarter, but AMD expected fourth-quarter processor sales to exceed seasonal trends, it said.

The fourth quarter is almost always the strongest quarter of the year for PC and chip companies.

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Tom Krazit

IDG News Service
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