SUNNYVALE, CA, 15 april 2004 — AMD (NYSE:AMD) today reported sales of $1.236 billion and net income of $45 million for the quarter ended March 28, 2004. Net income amounted to $0.12 per diluted share.
First quarter sales increased by 73 percent from the first quarter of 2003 and increased by three percent from the fourth quarter of 2003. In the first quarter of 2003, AMD reported sales of $715 million and a net loss of $146 million, or $0.42 per share. In the fourth quarter of 2003, AMD reported sales of $1.2 billion and net income of $43 million, or $0.12 per diluted share.
“Our performance in the first quarter of 2004 was driven by record sales, solid growth and strong execution,” said Robert J. Rivet, AMD’s chief financial officer. “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.
“AMD continued to increase its market leadership position in the wireless handset and embedded markets on the strength of our Spansion Flash memory solutions. During the quarter, products based on MirrorBit technology continued to gain solid acceptance, reflecting strong customer demand for their compelling price-performance advantage. In addition, we believe Spansion strengthened its NOR Flash market leadership position as it outpaced growth of the overall Flash market.
“Adoption of our leading AMD64 platform continued to accelerate with processor unit volume shipments more than doubling quarter on quarter. Responding to strong enterprise demand, AMD Opteron processor momentum continued with HP and Sun Microsystems shipping AMD Opteron processor-based servers for the first time. HP and Sun joined IBM and Fujitsu-Siemens and many other customers now offering leading-edge AMD Opteron processor solutions for the server and workstation markets.”
Business Overview
The combination of sales growth, improved gross margin and disciplined expense management led to an increase in operating income to $61 million in the first quarter of 2004, as compared to $46 million in the fourth quarter of 2003. The company reported an operating loss of $125 million in the first quarter of 2003. The gross margin improved by more than two percentage points over the fourth quarter of 2003 to 37.8 percent, largely driven by improved Flash memory sales and higher average selling prices (ASPs) from each of the two major business lines. In addition, cash flow from operations was positive for the third consecutive quarter and the cash and short-term investment balance as of March 28, 2004 remained at $1.3 billion.
The Memory Group achieved record sales of $628 million in the first quarter of 2004. This was an increase of 11 percent from the $566 million in the fourth quarter of 2003 and 188 percent from $218 million in the first quarter of 2003. The consolidation of FASL LLC began in the third quarter of 2003. In only its third quarter of existence since the integration of AMD’s and Fujitsu’s Flash memory operations, the Flash memory business achieved profitability in the quarter with operating income of $14 million, improving from an operating loss of $3 million in the fourth quarter of 2003. The improved Flash memory operating results were driven largely by increased sales, higher ASPs and improved cost synergies.
Flash memory sales grew during the first quarter due to strong performance in the wireless and embedded markets and increased shipments of products based on MirrorBit technology. Geographically, sales were especially strong in Asia Pacific and the Americas. Spansion’s Flash wafer facilities are aggressively ramping production at 110nm technology to meet increased customer demand for leading-edge products.
Computation Products Group (CPG) sales were $571 million in the first quarter of 2004. In a seasonally weak first quarter, this is a decrease of only two percent from the $581 million in the fourth quarter of 2003 and an increase of 22 percent from $470 million in the first quarter of 2003. CPG generated operating income of $67 million in the first quarter, an improvement from the $63 million in the fourth quarter of 2003, on the strength of a richer product mix.
Demand for the AMD Opteron, AMD Athlon 64 and AMD Athlon XP families of microprocessors remained strong. ASPs increased for the fourth straight quarter enhanced by continued penetration of the enterprise market. The AMD Opteron processor continued to see strong adoption in diverse vertical segments including financial services, web infrastructure, government, pharmaceutical, petrochemical and digital content creation. In addition, AMD Athlon 64 FX processor sales continued to be very strong in the gaming and PC enthusiasts’ markets.
AMD’s manufacturing transition to 90nm production for AMD64 processors is on-track with strong yields demonstrating excellent power consumption and heat dissipation characteristics. AMD will be initiating volume 90nm production in the second quarter and expects to deliver products for revenue in the third quarter of 2004.
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Over AMD
AMD (NYSE: AMD) is wereldwijd leverancier van integrated circuits (Flash Memory), onder andere toepasbaar in mobiele telefoons, en leverancier van processoren voor desktop-pc’s, workstations, servers en notebooks. De producten worden gefabriceerd in Europa, de Verenigde Staten, Japan en Azië. AMD, opgericht in 1969, is een Fortune 500- en Standard & Poors 500-bedrijf. Het hoofdkantoor bevindt zich in Sunnyvale, Californië. Voor meer informatie: www.amd.com.
Voor meer informatie:
AMD
Anne Salin
Telefoon: +33 616 753 836
E-mail: anne.salin(at)amd.com
Whizpr
Winnie Silvertand
Telefoon: +31 (0)317 410 483
E-mail: amd(at)whizpr.nl