AMD Reports First Quarter Results
Company reports sales of $902 million, net loss of $0.03 per share on record PC processor units Financial Statements AMD Selected Corporate Data
AMD today reported sales of $902,073,000 and a net loss of $9,163,000 for the quarter ended March 31, 2002. The net loss amounted to $0.03 per share. The company reported record unit sales of PC processors during the quarter.
Total sales declined by 24 percent from the like period of 2001 and by 5 percent from the fourth quarter of 2001. In the first quarter of 2001, AMD reported total sales of $1,188,747,000 and net income of $124,837,000, which amounted to $0.37 per diluted share. In the fourth quarter of 2001, AMD reported net sales of $951,873,000, and a net loss of $15,842,000, or $0.05 per share.
AMD sold a record 8 million PC processors in the first quarter of 2002. Total PC processor sales of $684 million for the quarter grew by 3 percent compared to $661 million in the like period of 2001. Processor sales declined by 3 percent from the record $703 million reported in the seasonally strong fourth quarter of 2001.
Sales of AMD memory products, principally flash memory devices, continued to be weak, amounting to $160 million, compared to $411 million in the like period a year ago and $196 million in the fourth quarter of 2001.
“The strength of the AMD Athlon™ XP processor enabled AMD to achieve record unit sales of PC processors,” said W.J. Sanders III, chairman and chief executive officer. “We believe AMD grew unit market share in PC processors, defined as Microsoft® Windows® compatible processors for mobile, desktop, server, and workstation computing. Sales of mobile processors grew in both units and dollars from the prior quarter. During the quarter, we began shipping our AMD Athlon XP processor produced on 130-nanometer (nm) technology (code-named “Thoroughbred”) for mobile applications.
“Shipments of the desktop version of the AMD Athlon XP processor on 130-nm technology will commence this quarter,” Sanders said. “Our conversion to 130-nm technology is going extremely well, and we now expect to complete the transition to 100 percent of PC processor production on 130-nm technology ahead of our previously announced year-end timetable.
“We also achieved substantial growth in sales of AMD Athlon MP processors for servers during the quarter. We have focused our initial sales and marketing efforts for AMD Athlon MP processors in the North American market, where we believe we have attained a unit market share of approximately 6 percent.
“While sales of flash memory products once again declined substantially, there are signs that the industry flash crash is now behind us,” Sanders said. “For the second consecutive quarter, total shipments in both units and bits increased while pricing remained weak. Bookings for flash memory products improved over the prior quarter, and visibility is improving. Demand was strongest for our higher-density flash memory devices, and we are seeing signs of a recovery in the cellular telephone sector, where we are gaining market share at the market leaders.
“We will begin sampling flash memory products with our proprietary MirrorBit™ technology in the current quarter, and expect that these products will contribute to Memory Group revenues in the second half of the year. MirrorBit technology is a breakthrough in memory cell architecture that enables a flash memory cell to store twice as much data as a standard flash memory cell with no compromise in device performance and reliability,” Sanders said.
“In January we saw working silicon for our Hammer family of processors. We have commenced sampling to key infrastructure partners. Our early results strengthen our confidence in our plans to begin shipments by the end of 2002,” Sanders concluded.
The company’s outlook statements are based on current expectations. The following statements are forward-looking, and actual results could differ materially. Economic and industry conditions remain uncertain, and continue to make it particularly difficult to forecast product demand. The company’s current outlook is based on the following projections.
The company expects substantial sequential growth in sales of flash memory devices in the second quarter.
The company expects that unit sales of PC processors in the second quarter will follow seasonal patterns, which generally show a sequential decline in the range of 5 to 10 percent. The company expects to maintain unit market share at current levels in the PC processor market. The company expects to sell substantially increased volumes of AMD Athlon XP processors manufactured on 130-nm technology in the current quarter.
Depending on unpredictable PC processor pricing patterns in a generally weak PC market and the rate of growth in the flash memory market, AMD aggregate sales are expected to be in the range of $820 to $900 million in the second quarter.
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 of its web site at http://www.amd.com
. The webcast will be available for two weeks after the teleconference.
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 forward-looking statements in this release involve risks and uncertainty that could cause actual results to differ materially from current expectations. Risks include the possibility that global business and economic conditions will worsen resulting in lower than expected sales in the second quarter of 2002; that Intel Corporation pricing, marketing programs, product bundling, new product introductions or other activities targeting the company's processor business will prevent attainment of the company's current PC processor sales plans; that demand for personal computers and, in turn, demand for the company's PC processors will be lower than currently expected; that the company will not continue to be successful in ramping production of the company's AMD Athlon XP processors on 130-nanometer technology in Fab 30 in Dresden, Germany, on the current schedule; that demand for the company's flash memory products will be lower than currently expected; that the company will not achieve substantial sequential growth in sales of flash memory devices in the current quarter; and that the company will not be able to maintain market share in the PC processor market and gain flash memory market share in the cellular telephone sector as expected. 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 30, 2001.
AMD is a global supplier of integrated circuits for the personal and networked computer and communications markets with manufacturing facilities in the United States, Europe, Japan, and Asia. AMD, a Fortune 500 and Standard & Poor’s 500 company, produces microprocessors, flash memory devices, and support circuitry for communications and networking applications. Founded in 1969 and based in Sunnyvale, California, AMD had revenues of $3.9 billion in 2001. (NYSE: AMD).