Opteron leads AMD’s bumper quarter

Free of its Spansion memory business and racking up the server sales, AMD had very positive news to report with its latest financial figures, recording a 70 per cent jump in sales on the same period a year ago.

For its first quarter of the fiscal year, AMD reported sales of $1.33 billion and net income of $185 million, which translates into earnings per share of $0.38. This compares to sales of $0.78 billion and a loss of $17.4 million for the same quarter in 2005.

As with previous quarters, the Opteron chip was identified as a star performer, drawing record revenues due to strong demand for dual-core processors for servers and workstations. According to AMD, general processor sales were especially strong in Greater China, South Asia, Russia and Latin America.

‘AMD had another great quarter,’ said Robert J. Rivet, AMD’s chief financial officer. ‘Building on our positive momentum, we believe we once again gained dollar market share based on strong customer demand for AMD64 single and multi-core processors.’

Rivet also highlighted the role of the Opteron, and other factors: ‘We expanded our global customer base in the quarter, achieved record AMD Opteron processor sales, increased our average selling price (ASP), and realized year-over-year sales growth of 71 percent. Our manufacturing strategy execution was excellent and our technology transitions remain on track, with 65nm production shipments expected in the second half of 2006.’

The company also increased its gross margins – effectively the proportion of profit from products sold, which AMD attributed to ‘product mix improvement, higher desktop and mobile ASPs, and manufacturing efficiencies’.

Wall Street welcomed the better-than-expected results (having anticipated earnings per share of around $0.3), with one analyst estimating that AMD had increased its share of the $32 billion market for personal computer processors by two percentage points.

Looking ahead, AMD expects to see a seasonal flattening of results, but still anticipates what would be a 65 per cent increase from comparable sales in the second quarter of 2005.

You can read the full figures on the investor section of the AMD website.

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