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AMD sees big jump in revenue, profits

Sales of notebook and server chips help drive a solid quarter for the thorn in Intel's side.

Advanced Micro Devices saw sales jump 23 percent and net income rise by 72 percent in the third quarter, thanks to increasing demand for PCs combined with greater acceptance for its products.

The Sunnyvale, Calif.-based processor maker reported sales of $1.5 billion and net income of $76 million, or 18 cents in earnings per share, for the period ended Sept. 25.

That compares with sales of $1.24 billion in the third quarter of 2004 and net income of $44 million, or 12 cents in earnings per share. Last quarter, AMD reported sales of $1.26 billion, but net income of $11 million.

The surge came largely through sales of notebook and server chips. Turion, the company's latest notebook offering, began to ship in volume during the quarter just ended. More large customers also began to adopt servers based on the Opteron processor. Now, 85 percent of the Global 2000 (or their subsidiaries) use AMD products. The figure, often cited by AMD, has climbed steadily in the past two years. New customers include Saudi Aramco, Liberty Media and United Parcel Service.

Sales for the Computation Product Group, which makes processors, rose 44 percent from $673 million a year ago to $969 million, a record.

AMD's battered Memory Products Group also reported some good news. Although the group's revenue declined from a year earlier, it was up 12 percent from $462 million in the previous quarter to $516 million. The operating loss also decreased for the group from $90 million in the second quarter to $50 million.

The change in part was due to large cellular manufacturers placing orders for flash memory. AMD is currently trying to spin off its flash memory joint venture, which goes by the brand name Spansion, in an initial public offering.