AMD Reports First Quarter Results
-AMD earns a record $189.3 million, or $1.15 per share, on record quarterly sales-
SUNNYVALE, CA --
AMD today reported record sales of $1,092,029,000 and record net income of $189,349,000 for the quarter ended April 2, 2000. Net income amounted to $1.15 per diluted share. The company reported strong growth in each of its product groups - the Computation Products Group, the Memory Group, and the Communications Group.
Total revenues grew by 13 percent over the immediate-prior quarter ended December 26, 1999, and by 73 percent over the like period of 1999. In the immediate-prior quarter, AMD reported sales of $968,710,000 and net income of $65,080,000, or $0.43 per diluted share. In the first quarter of 1999, AMD reported sales of $631,593,000, and a net loss of $128,367,000, or $0.88 per share.
"AMD had the best quarter in its history," said W.J. Sanders III, chairman and chief executive officer. "Each of our product groups reported significant growth in the first quarter. Led by strength in PC processors and Flash memory sales, sales from AMD's three product groups grew by more than 13 percent sequentially and by more than 83 percent over the comparable period of 1999.
"Unit sales of AMD Athlon™ processors increased by 50 percent to 1.2 million units," Sanders continued. "Total PC processor revenues grew 14 percent sequentially and by more than 65 percent over the first quarter of 1999. Total unit sales, including AMD Athlon and AMD-K6® family processors, reached a new record at nearly 6.5 million units. Reflecting a richer PC processor portfolio with the industry's broadest range of high-performance solutions, revenues from AMD Athlon processors exceeded revenues from AMD-K6 family processors."
During the quarter, AMD introduced the industry's first 1-gigahertz (GHz) PC processor and 850-, 900-, and 950-megahertz (MHz) versions of the AMD Athlon processor. AMD also began sampling two new versions of the AMD Athlon processor family, that incorporate on-chip L2 cache. The first, code-named "Thunderbird," is targeted at the performance segment of the PC market. The second, code-named "Spitfire," is targeted at the value segment. Both products are planned for shipment later this quarter.
The company also commenced shipments of a 550-MHz AMD-K6-2 processor targeted at the value segment of the desktop PC market and a 500-MHz AMD-K6-2 processor for mobile systems.
The company reported that continuing strong demand for Flash memory devices coupled with extraordinary operational execution resulted in record sales of $327 million for the Memory Group, an increase of 19 percent from the immediate-prior quarter and more than 150 percent from the comparable period of 1999. During the quarter, AMD concluded multi-year agreements with Alcatel and Cisco Systems to supply Flash memory products. AMD said it expects that demand for Flash memory devices will continue to exceed supply for the remainder of the year and into 2001.
Communications Group sales increased by 7 percent over the immediate-prior quarter and by 59 percent over the first quarter of 1999 driven by strength in telecommunications line-card circuits and devices for physical-layer Ethernet solutions.
"Demand continues to be strong across each of our product groups. With a stronger product portfolio than at any time in our history, we look forward to continuing growth," Sanders concluded.
The company's outlook statements are based on current expectations. The following statements are forward-looking, and actual results could differ materially.
The company currently projects sales in the second quarter to be modestly higher than the record level of the first quarter. The company's current overall outlook is based on the following projections for its major product lines:
The company expects that unit shipments of PC processors could approach the record level of the first quarter. Unit shipments of AMD Athlon processors are expected to increase to 1.8 million units, resulting in a richer mix and a higher blended average selling price and higher revenues for PC processors.
Communications Group sales are projected to grow by more than 10 percent over first-quarter levels.
AMD projects that Memory Group sales will grow in the high single-digit range over the first quarter and resume double-digit growth in the third and fourth quarters of 2000. The company believes that demand for Flash memory products will continue to exceed supply.
With the Semiconductor Industry Association forecasting worldwide growth in the range of 20 to 25 percent in 2000, the company believes it will continue to grow faster than the industry, with total sales growth of more than 50 percent for the year as a whole.
AMD will hold a teleconference for the financial community at 2:30 PM Pacific Standard Time today to discuss first-quarter financial results. AMD will provide a real-time audio broadcast of the teleconference on the Investor Relations page or http://www.streetfusion.com. The webcast will be available for two weeks after the teleconference.
AMD will also provide a telephone recording of the teleconference, which will be available at approximately 4:30 PM PT today. Interested persons may listen to the playback of the teleconference by calling the following toll-free number: 1-800-633-8284 and entering the code number 14739320.
This release contains forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements in this release involve risks and uncertainty that could cause actual results to differ materially from current expectations. There can be no assurance that demand for the company's products will continue at current or greater levels, or that the company will continue to grow revenues. There are also risks that the company will not be able to produce the AMD Athlon processor in the volume, speed mix or with the feature set necessary to meet customer requirements and the company's plans and goals; that Intel Corporation pricing, marketing programs, new product introductions or other activities targeting the company's processor business will prevent attainment of the company's current processor sales plans; that third parties may not provide timely or adequate infrastructure solutions to support the AMD Athlon processor, including new derivative products scheduled to begin shipment in the second quarter; and that the company will not be able to grow demand for its PC processors sufficiently to utilize fully its processor production capacity. We urge investors to review in detail the risks and uncertainties in the company's Securities and Exchange Commission filings, including but not limited to the report on Form 10-K for the year ended December 26, 1999.