CNET también está disponible en español.

Ir a español

Don't show this again

Tech Industry

AMD hurdles 2Q estimates, approves 2-for-1 split

    Advanced Micro Devices (NYSE: AMD) reported better-than-expected second earnings earnings and announced plans for a stock split Wednesday.

    After market close, the chipmaker reported second quarter net income of $207.1 million, or $1.21 per share. First Call's survey of 18 analysts predicted an AMD profit of $1.14 per share for the quarter ended July 2.

    AMD also said it will carry out a 2-for-1 stock split, payable Aug. 21 for shareholders of Aug. 7 record.

    Shares of AMD rose 1 to 92 in Wednesday's regular trading, prior to the earnings report.

    Second quarter revenue increased to $1.17 billion, up 7 percent sequentially and up 97 percent year-over-year. Sales of PC processors rose 106 percent and flash memory increased 118 percent from a year earlier. The memory group's sales rose more than 10 percent sequentially.

    Despite recently voiced worries from a prominent Salomon Smith Barney analyst concerned about the flash memory market's growth, AMD remains optimistic about that field. Growth will stay strong, the company said.

    "We do not see any evidence of this loosening," said Ben Anixter, vice president of external affairs. "In fact, our customers, who have long-term agreements with us, are asking for up to 50 percent more bits than they had already contracted for the year 2001.... We see a very strong market."

    AMD believes flash memory bit demand will double annually for the next three to five years, Anixter said.

    The processor market also looks robust, executivres said. Shipments of 1 GHz Athlon chips quintupled during the quarter, said Hector J. Ruiz, president and chief operating officer. "We were able to meet our commitments to all our customers in this high-end segment," Ruiz said, contrasting Athlon's availability with a continued shortage of Intel's 1 GHz Pentium III chips.

    AMD now sees processor shipments approaching 28 million for the year, compared to the company's earlier forecast of 25 million. About 13 million processors have already shipped this year, AMD said.

    The company expects to boost revenue sequentially in the third quarter. Memory group sales in the third quarter should rise another 10 percent from the second quarter, with demand still exceeding supply, the company said.

    Processor shipments should also remain robust, the company said.

    "With the additional production capacity of our new Dresden facility, we believe we are on target to double unit shipments of AMD seventh-generation processors in each of the next two quarters to 3.6 million units in the third quarter and to 7.2 million units in the fourth quarter," Ruiz said.

    AMD shipped more than 6 million processors in the second quarter. Combined sales of Athlon and Duron chiops rose 52 percent from the first quarter to more than 1.8 million units.

    Wednesday's AMD release comes a day after Intel reported second quarter results ahead of expectations. Like AMD, Intel also sees a strong second half.

    Despite increased competition between the two major PC processor companies, prices might not fall much more. AMD expects its average selling price to rise in the second half, said W.J. Sanders III, chairman and CEO.

    Intel might not lower prices further because it needs to maintain profits, and AMD no longer feels the need to cut prices to gain market share because Athlon chips are competitive on a speed basis, Sanders III said during the analyst call.

    • Intel vs. AMD: Get ready for Round 3
    • Delayed Itanium not Intel's only problem>