AMD Reports First Quarter Results; Record Quarterly Microprocessor Sales and Operating Income

SUNNYVALE, Calif.—(BUSINESS WIRE)—April 13, 2005— AMD (NYSE: AMD) today reported sales of $1.227 billion and an operating loss of $46 million for the quarter ended March 27, 2005. The first quarter net loss of $17 million amounted to $0.04 per share.

First quarter sales decreased one percent compared to the first quarter of 2004 and decreased three percent from the fourth quarter of 2004. In the first quarter of 2004, AMD reported sales of $1.236 billion and net income of $45 million, or $0.12 per diluted share. In the fourth quarter of 2004, AMD reported sales of $1.264 billion and a net loss of $30 million, or $0.08 per share.

"Our microprocessor business delivered record sales in what is typically a seasonally down quarter, driven by increased sales across all product categories," said Robert J. Rivet, AMD's chief financial officer. "We continued to gain momentum with year-over-year sales growth of 31 percent, highlighted by AMD Opteron(TM) and AMD Athlon(TM) 64 processor sales, each of which more than doubled from a year ago.

"The NOR Flash memory market continued to experience industry-wide oversupply and strong pricing pressure. We experienced a rise in unit shipments, but our average selling price (ASP) declined significantly, resulting in weaker than expected sales."

BUSINESS OVERVIEW

First quarter operating loss was $46 million as compared to operating profit of $61 million in the first quarter of 2004 and $20 million in the fourth quarter of 2004. First quarter gross margin was 34 percent compared to 41 percent in the fourth quarter of 2004. This decrease was largely due to a weak Flash memory pricing environment.

Record Computation Products Group (CPG) sales of $750 million were up 31 percent from the first quarter of 2004 and increased three percent from $730 million in the fourth quarter of 2004. CPG generated record operating income of $92 million in the first quarter, up from $89 million in the fourth quarter of 2004. CPG's first quarter sales growth was driven by record server and mobile processor sales, and strong overall penetration in high-growth regions, particularly greater China. AMD64 processor sales grew a record 30 percent sequentially and represented 63 percent of CPG sales.

AMD's manufacturing conversion for processor products from 130 to 90 nanometers is ahead of schedule and yields are higher than planned. This higher unit capacity will continue to provide AMD the ability to support accelerating customer demand across product segments.

Memory Group sales of $447 million decreased 29 percent from the first quarter of 2004 and decreased 11 percent from $504 million in the prior quarter. The Memory Group incurred an operating loss of $110 million, as compared to an operating loss of $39 million in the fourth quarter of 2004. Unit volume shipments were up quarter over quarter. Spansion also commenced volume shipments of the industry-leading 256-megabit MirrorBit(TM) Flash memory device to three of the top 10 wireless phone manufacturers.

ADDITIONAL HIGHLIGHTS OF THE QUARTER

-- Several strategic OEM partners launched new platforms based on AMD Opteron processors. HP expanded its enterprise-class offerings with the addition of the ProLiant DL385, the ProLiant BL25p and BL35p Server Blades and the HP xw9300 workstation. Sun Microsystems launched second-generation v20z and v40z servers featuring AMD Opteron processor models 252 and 852.

-- AMD64 dual-core processor technology leadership was demonstrated on existing Sun, HP and Cray servers and workstations with AMD Opteron dual-core processors.

-- Fifty-five percent of the top 100 global companies or their affiliates as ranked by the Forbes Global 2000 now rely on AMD64 processor-based systems to run enterprise applications. Additional new customers include Akamai, Cable & Wireless, EDS, Goodyear, Honda, Lucas Films, MBNA, MetLife of Mexico and SingTel EXPAN Data Centers.

-- AMD launched AMD Turion(TM) 64 mobile technology, the first 64-bit mobile processor family designed specifically for thin-and-light notebooks.

-- In the first quarter, AMD received 21 awards for AMD64 technology and products from leading publications and organizations, including:

-- The U.S. Environmental Protection Agency -- awarded AMD's Cool'n'Quiet(TM) technology with an ENERGY STAR(R) Certificate of Recognition for advancing computer energy efficiency.

-- In-Stat Microprocessor Report's best desktop processor of 2004 was the AMD Athlon(TM) 64 FX-55 processor.

-- PC Market (China) voted the AMD Athlon 64 processor "PCM Best of IT Award 2004."

-- Spansion began volume shipments of the only single-die 512-megabit NOR Flash memory device in production for the embedded market.

-- Spansion received a Most Valued Partner award from Samsung Electronics Co., Ltd. for 2004, and the 2004 Best Supplier award from Lenovo Mobile Communication Technology.

-- The AMD Alchemy(TM) Au1200(TM) processor, a low-power, high-performance, system-on-a-chip solution optimized for personal media players (PMP) was launched during the quarter.

CURRENT OUTLOOK

AMD's outlook statements are based on current expectations. The following statements are forward looking, and actual results could differ materially depending on market conditions.

In the typically seasonally down second quarter, AMD expects processor sales to be flat or down slightly.

Because of Spansion's SEC Form S-1 filing today, AMD is not providing guidance for the Flash memory business.

AMD TELECONFERENCE

AMD will hold a conference call for the financial community at 2:30 p.m. PT today to discuss quarterly financial results. AMD will provide a real-time audio broadcast of the teleconference on the Investor Relations page of its Web site at www.amd.com or www.streetevents.com. The webcast will be available for 10 days after the conference call.

CAUTIONARY STATEMENT

This release contains forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements in this release involve risks and uncertainties that could cause actual results to differ materially from current expectations. Risks include the possibility that global business and economic conditions will worsen resulting in lower than currently expected sales in the second quarter of 2005; that Intel Corporation's pricing, marketing programs, product bundling, new product introductions or other activities targeting the company's processor business will prevent attainment of the company's current processor sales plans; that demand for personal computers and, in turn, demand for the company's processors will be lower than currently expected; that adoption of AMD64 products by OEMs will not continue to occur as expected; that demand for the company's Flash memory products will be lower than currently expected and that the company will not be able to increase or maintain Flash memory market share; that Intel Corporation will negatively affect NOR Flash memory prices; that customer acceptance of MirrorBit technology will not continue to increase; that the company may not achieve its current product and technology introduction or implementation schedules; that the company will not be able to raise sufficient capital to enable it to establish leading-edge capacity to maintain its market leadership positions; and that solutions providers will not timely provide the infrastructure, including operating systems and applications, to support the company's AMD64 technology. We urge investors to review in detail the risks and uncertainties in the company's Securities

1 | 2 | 3  Next Page »



Review Article Be the first to review this article

EMA:

Featured Video
Editorial
Peggy AycinenaWhat Would Joe Do?
by Peggy Aycinena
Retail Therapy: Jump starting Black Friday
Peggy AycinenaIP Showcase
by Peggy Aycinena
REUSE 2016: Addressing the Four Freedoms
More Editorial  
Jobs
ACCOUNT MANAGER MUNICH GERMANY EU for EDA Careers at MUNICH, Germany
AE-APPS SUPPORT/TMM for EDA Careers at San Jose-SOCAL-AZ, CA
Development Engineer-WEB SKILLS +++ for EDA Careers at North Valley, CA
Principal Circuit Design Engineer for Rambus at Sunnyvale, CA
Manager, Field Applications Engineering for Real Intent at Sunnyvale, CA
FAE FIELD APPLICATIONS SAN DIEGO for EDA Careers at San Diego, CA
Upcoming Events
Zuken Innovation World 2017, April 24 - 26, 2017, Hilton Head Marriott Resort & Spa in Hilton Head Island, SC at Hilton Head Marriott Resort & Spa Hilton Head Island NC - Apr 24 - 26, 2017
CST Webinar Series



Internet Business Systems © 2016 Internet Business Systems, Inc.
595 Millich Dr., Suite 216, Campbell, CA 95008
+1 (408)-337-6870 — Contact Us, or visit our other sites:
AECCafe - Architectural Design and Engineering TechJobsCafe - Technical Jobs and Resumes GISCafe - Geographical Information Services  MCADCafe - Mechanical Design and Engineering ShareCG - Share Computer Graphic (CG) Animation, 3D Art and 3D Models
  Privacy Policy