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
"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."
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
-- 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
-- In the first quarter, AMD received 21 awards for AMD64
technology and products from leading publications and
-- 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
-- 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
-- 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.
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 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.streetevents.com. The webcast will be available for 10 days after
the conference call.
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