- Advanced Micro Devices Inc. reported fourth-quarter financial results Wednesday that were in line with its lowered forecast, although its earnings fell short of analysts' expectations. The chip maker also said it expects its first-quarter 2001 results to be dampened by "normal seasonal weakness" and weak PC demand.
AMD reported revenue of US$1.1 billion and earnings per share of $0.53 for the quarter ending Dec. 31, 2000, according to a statement. Net income for the period was $177.9 million, the Sunnyvale, California-based chip company said. Analysts had expected AMD to report earnings per share of $0.55 and revenue of $1.2 billion, according to First Call/Thomson Financial.
The deterioration of the PC market late in the year impacted sales of PC processors in the fourth quarter, but AMD outperformed the semiconductor industry with "extraordinary growth," William "Jerry" Sanders, chairman and chief executive officer of AMD, said in the statement. AMD achieved record unit shipments of nearly 7 million processors during the quarter, he said.
In early December, AMD reduced its forecast for the fourth quarter, citing weak year-end demand. The company predicted that earnings would be between $0.50 and $0.60 a share, far below the $0.68 analysts had been hoping for before the warning.
Unit and dollar sales of AMD Athlon and Duron processors increased despite weak PC demand in the U.S. during the quarter, Sanders said, speaking in a teleconference with press and analysts to discuss the results. Unit sales of Duron processors, however, were hurt by AMD's inability to acquire certain chipsets, he said. Flash memory sales remained strong and more than doubled during 2000.
Looking ahead, AMD expects sales in its first fiscal quarter of 2001 to increase year-on-year, but to be no better than flat sequentially from the fourth quarter of 2000, the company said.
Growth for 2001 as a whole could be in the range of 15 percent, AMD said. That would lead to income of $2.00 per diluted share. Analysts expect AMD to report fiscal 2001 earnings of $2.04 per share, according to First Call/Thomson Financial.
Discussing the company's microprocessor plans, Sanders said it will be the third quarter of the year before its Duron desktop processor hits 1GHz. Just recently, AMD unleashed an 850MHz version of the chip, which is aimed at more cost-conscious consumer PC buyers.
AMD will have a 1.3GHz version of its Athlon chip for the high-performance desktop market by the end of the first quarter, AMD officials on the call said. As of now, Athlon processors come at a top speed of 1.2GHz.
All Athlon production will soon be moved to the Fab 30 production plant in Dresden, Germany, and all production of Athlons will be at speeds of 1GHz or greater by the second quarter of the year, the officials said.
Company officials also announced that the first members of a new processor family called Palomino will be ready by the end of the first quarter. Palomino is designed to help AMD participate in the high-performance mobile market, with versions also expected for desktops and workstations.
Looking further ahead, AMD's eighth-generation mobile processor, dubbed ClawHammer, could reach 2GHz in 2002, the officials said. ClawHammer is effectively the mobile equivalent of SledgeHammer, AMD's first 64-bit processor for desktop PCs.
"We believe we have a very competitive product line," Sanders said during the teleconference. It should help the company offset some of the woes of the slow PC sales, he said.
Advanced Micro Devices' (AMD) shares on the Nasdaq stock market closed Wednesday at $18.50, up 8.03 percent or $1.37. AMD released its financial results after the U.S. financial markets closed.