AMD Announces Q3 Results

A strong showing for 64-bit processors put some juice in the third-quarter results reported by Advanced Micro Devices (NYSE: AMD) last night.

For the quarter ended Sept. 26, AMD reported net income of $44 million, or 12 cents per diluted share, on sales of $1.24 billion.

That's a nice turnaround from the loss of $31 million, or 9 cents per share, on sales of $954 million reported for the same period last year. This quarter's figures were boosted by strong performance in the chip manufacturers AMD64 processor family, which includes the Opteron server/workstation chip and the Athlon 64 mobile processor.

The move toward 64-bit technology is gaining momentum, driven by applications that require high performance and address large amounts of both physical and virtual memory. All the major server vendors are scrambling to deploy 64-bit technology in their product lines (see 64-Bit Blades Battle).

AMD64 accounted for more than one-third of the sales in AMD's Computation Products Group, executives said on last night’s conference call. This was driven by a higher-than-average selling price coupled with increased unit volumes, they said. CEO Hector Ruiz predicted AMD64 will represent more than 50 percent of the company’s processor revenues by the end of the year.But AMD’s figures did not go completely according to plan. The third-quarter sales of $1.24 billion came in below analyst estimates of $1.3 billion. In fact, sales were down 2 percent from the previous quarter, when AMD reported profits of $32 million, 9 cents per share, on sales of $1.26 billion.

An AMD exec on the conference call nonetheless painted a positive picture for the fourth quarter, which encompasses the busy Christmas season. AMD’s processor sales are likely to exceed seasonal levels and sales of the company’s Flash memory products will be "flat to up," he said.

Another exec forecast “some very exciting things” in the x86 arena this quarter. There will be some “low-cost, low-power activities,” he said. [Ed. note: Does watching the World Series on the couch count?]

With AMD facing some stiff competition from archrival Intel Corp. (Nasdaq: INTC), Ruiz also pointed to AMD’s performance in the enterprise. In the third quarter the company announced several new Opteron processor-based server customers including AOL, Merrill Lynch & Co. Inc., and Fox Sports. “I think that we can gain share in the fourth quarter of this year,” he said.

— James Rogers, Site Editor, Next-gen Data Center Forum0