AMD reports record revenues

Sunnyvale (CA) - AMD followed Intel and reported second quarter results with strong revenues and earnings. Investors however sent the stock down 5 percent Thursday on concerns over expectations of "moderate" sales for the third quarter.

AMD’s revenues reached at new record at $1.3 billion, more than double what the company reported for the same quarter last year. Net income went from a loss of $140 million to $32 million in the most recent quarter. Sequentially, revenues remained about flat, profit slid by about 29 percent from 45 million.

As Intel, AMD’s strong results were driven by a significant sales increase of its Flash memory unit with operating income rising from $14 million to $45 million. "In addition, accelerating AMD Opteron and Mobile AMD Athlon 64 processor sales contributed to a double-digit operating margin for our microprocessor business, said Robert Rivet, AMD’s chief financial officer.

The Memory Group achieved record sales of $673 million in the second quarter, an increase of 220 percent from $211 million in the second quarter of 2003 and seven percent from $628 million in the first quarter of 2004. Processor and chipset sales were $554 million in the second quarter of 2004. This is an increase of 36 percent from $406 million in the second quarter of 2003 and is a three percent decrease from $571 million in the first quarter of 2004. CPG generated operating income of $58 million in the second quarter, a decrease from $67 million in the first quarter of 2004.

AMD said that demand for AMD64 processors accelerated significantly during the most recent quarter. Increased AMD Opteron processor sales were attributed to "growing enterprise demand and increased shipments to tier-one customers." Additionally, consumer sales of notebook PCs powered by Mobile AMD Athlon 64 processors increased considerably, the company said.

Despite a solid quarter, investors were not happy enough, to give AMD’s stock a boost. Reasons for a five percent loss in early trading Thursday were mainly attributed to the company’s outlook for the third quarter. While competitor Intel believes that its revenues will sharply increase when the industry enters the "growth half" of the year, AMD expects "total sales to increase moderately."