First-quarter earnings exceed expectations, as revenue manages to top the seasonally strong fourth quarter.
The Sunnyvale, Calif.-based chipmaker reported earnings of $45 million, or 12 cents a share, well above analyst forecasts of 3 cents. Revenue came to $1.26 billion, surpassing expected revenues of $1.17 billion. Both of its main product groups--microprocessors and flash memory--were profitable.
Revenue for the quarter even exceeded the seasonally strong fourth quarter by about $30 million.
For the first quarter of last year, AMD reported a net loss of $146 million on revenue of $715 million.
"Our performance in the first quarter of 2004 was driven by record sales, solid growth and strong execution," Robert Rivet, AMD's chief financial officer, said in a prepared statement. "Our flash memory and microprocessor businesses delivered solid sales results in a seasonally down quarter, and both business lines were profitable. Sales were especially strong in Asia Pacific and Latin America."
Cross-freeway rival Intel on Tuesday reported first-quarter earnings of $1.7 billion, or 26 cents per share, on revenue of $8.1 billion. While Intel's results showed a significant improvement from the year before, the company missed expectations because of costs associated with a legal settlement with Intergraph.
In regular trading on the New York Stock Exchange, AMD shares closed at $17.12. In after-hours trading, the stock gained 27 cents, or about 1.5 percent.
The semiconductor industry has been recovering since the second half of 2003, and AMD has ridden the wave. The company beat analysts' expectations in the third and fourth quarters of last year. The fourth quarter marked the company's first profitable period since the second quarter of 2001.
While the upswing in the market has helped AMD, its recovery can also be attributed to deliberate strategies. The average selling price of its microprocessors has been rising, reversing a trend at AMD of offering large discounts to gain market share.
In the first quarter, microprocessor revenue came to $571 million, a slight decline from $581 million in the fourth quarter but a 22 percent increase from the first quarter of 2003.
The company also has been growing its market share in flash memory by capitalizing on an Intel price hike last year that backfired and by absorbing the remainder of a joint venture with Fujitsu.
Flash revenue for the first quarter hit a record $628 million, an 11 percent increase from $566 million in the fourth quarter of 2003 and a gain of 188 percent from $218 million in the first quarter of 2003. (Last year's figures do not include the Fujitsu acquisition.)
The flash group also achieved profitability in the quarter with operating income of $14 million, compared with an operating loss of $3 million in the fourth quarter of 2003.
Next quarter, the company expects flash memory revenue to grow and microprocessor revenue to decline slightly, in line with seasonal trends.