Tech Industry

AMD sees 1Q upside surprise

The financial picture keeps improving for Advanced Micro Devices (NYSE: AMD).

At a Goldman Sachs investment conference Friday, the chipmaker said it expects to report flat or slightly higher first quarter revenue on a sequential basis. Wall Street analysts generally expected a seasonal decline for AMD following the traditionally strong holiday period.

"Demand for low-end microprocessors has been stronger than expected," said W.J. Sanders III, chairman and CEO of AMD. "Business across the board continues to be robust."

Friday's announcement comes not long after AMD shocked Wall Street and topped analyst consensus by 4,200 percent in the fourth quarter. Sales of the company's processors have been surging even as rival Intel (Nasdaq: INTC) has seen problems making enough Coppermine chips to meet OEM demands.

One analyst who wasn't surprised was Needham & Co.'s Tad LaFountain, who was already factoring a 6 percent sequential sales improvement in his first quarter model for AMD. LaFountain's first quarter profit estimate of 58 cents per share was at the top end of the range of analyst forecasts and 26 cents higher than First Call consensus.

"AMD is better equipped to meet OEM demand that most people expected," LaFountain said.

The company seems to be doing especially well among mobile computers, where the K6-2 is getting wide acceptance, LaFountain said.

Shares of AMD rose immediately following the company's afternoon announcement. With about an hour left in regular trading, AMD traded at 43 7/8, up 1 3/8 for the session.>