AMD REPORTS SECOND QUARTER RESULTS

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AMD REPORTS SECOND QUARTER RESULTS

Post by Apoptosis » Wed Jul 13, 2005 3:11 pm

AMD REPORTS SECOND QUARTER RESULTS

- EPS of $0.03 Driven by Sales of $1.260 Billion -

- Microprocessor Business Establishes New All-time Quarterly Records in
Total Sales, Server and Mobile Processor Sales, Gross Margin, and
Operating Income -
SUNNYVALE, CA - July 13, 2005 - AMD (NYSE:AMD) today reported sales of
$1.260 billion and net income of $11 million, amounting to $0.03 per
diluted share, for the quarter ended June 26, 2005.

Second quarter sales were flat compared to the second quarter of 2004
and increased three percent from the first quarter of 2005. In the
second quarter of 2004, AMD reported sales of $1.262 billion and net
income of $32 million, or $0.09 per diluted share. In the first quarter
of 2005, AMD reported sales of $1.227 billion and a net loss of $17
million, or $0.04 per share. The operating loss was $7 million as
compared to operating income of $72 million in the second quarter of
2004 and an operating loss of $46 million in the first quarter of 2005.


"Our microprocessor business delivered another record quarter driven by
increased demand for AMD server and mobile processors from our largest
global OEM customers," said Robert J. Rivet, AMD's chief financial
officer. "Once again we continued to gain momentum with microprocessor
sales growth increasing 38 percent compared to the second quarter of
2004. The solid overall demand was enhanced by our newer processor
offerings. Strong Dual-Core AMD Opteron(tm) processor sales contributed
to an 89 percent revenue increase in our server products from the prior
quarter. This demonstrates the acceptance of the AMD64 platform by
enterprise customers. Likewise, the AMD Turion(tm)64 processor captured
more than 60 design wins and drove record mobile sales in the
thin-and-light mobile PC category."

"Memory Products Group sales increased slightly in the quarter, driven
by record MirrorBit(tm) Flash memory sales and overall higher unit
demand."

BUSINESS OVERVIEW

Second quarter gross margin was 39 percent compared to 34 percent in the
first quarter of 2005. The improvement was largely due to record
Computation Products Group (CPG) gross margins.

Record CPG sales of $767 million increased 38 percent from the second
quarter of 2004 and increased two percent from $750 million in the first
quarter of 2005. CPG generated record operating income of $110 million
in the second quarter, up from $92 million in the first quarter of 2005.
CPG's second quarter sales growth was driven by record server and mobile
processor sales, a six percent higher overall average selling price, and
record sales to our largest global OEM customers. Geographically, sales
were especially strong in China, North America and all of our
high-growth markets.

Memory Products Group sales of $462 million decreased 31 percent from
the second quarter of 2004 and increased three percent from $447 million
in the first quarter or 2005. Memory Products Group incurred an
operating loss of $90 million, as compared to an operating loss of $110
million in the first quarter of 2005. MirrorBit Flash memory sales
accelerated to more than 20 percent of total Memory Products Group sales
in the quarter, with increased wireless demand for second-generation,
110nm MirrorBit devices. Quarter-over-quarter, sales in Europe and the
Americas increased and unit volume shipments were up twelve percent.


ADDITIONAL HIGHLIGHTS OF THE QUARTER

*AMD shipped true Dual-Core technology with the AMD Athlon(tm) 64 X2
Dual-Core processors for desktop PCs and Dual-Core AMD Opteron(tm)
processors for servers and workstations. Many of AMD's OEM customers
announced Dual-Core systems, including Acer, HP, IBM, Lenovo, Sun,
Supermicro Computer, Inc., Alienware, Cray, and Dawning.

*Several of the largest global OEMs broadened their AMD product
offerings for small to mid-size businesses and enterprise markets,
including:

* Sun Microsystems, Inc. introduced the Sun Ultra 20 Workstation
and unveiled the Sun Fire V40z server, both powered by the
Dual-Core AMD Opteron processor. Sun also announced that the versatile
Solaris 10 Operating System supports servers based on the
Dual-Core AMD Opteron processor.
* HP launched the HP ProLiant BL45p 4P blade server, the HP
dx5150 Business Desktop, and the AMD Turion 64 processor-powered HP
Compaq nx6125 laptop for small to mid-size businesses.
* IBM launched the AMD Opteron IBM LS20 2P blade server.
* Fujitsu Siemens Computers introduced a new line of
professional PCs featuring the AMD Athlon 64 processor, the
ESPRIMO P and ESPRIMO E series for business users.

*AMD, in conjunction with other industry partners, continued to deliver
highly-differentiated, industry-first products, including:

* HP and AMD, working closely with the Lance Armstrong
Foundation (LAF), developed the HP Special Edition L2000
"LIVESTRONG" notebook featuring the AMD Turion 64 processor. This
one-of-a-kind consumer PC bears the LIVESTRONG message and a
reproduction of Lance Armstrong's autograph. Fifty U.S. dollars from
each HP Special Edition L2000 Notebook PC will go to the LAF to help
it fund its public health, advocacy, research and education initiatives
for people with cancer.
* Acer launched the AMD Turion 64 processor-powered Ferrari
4000, the world's first notebook to harness cutting-edge carbon
fiber technology pioneered and perfected in the world of Formula One and
in the aerospace industry.

* More than 75 of the top 100 companies in the Forbes Global 2000 or
their subsidiaries have adopted AMD64 technology. Airbus,
Alcatel, Computer Sciences Corporation, CyberTrader, Inc., a Charles
Schwab company, The D.E. Shaw Group, Unilever, Vodafone and
7-Eleven, Inc. represent the growing ranks of enterprises using AMD
technology.

*The AMD64 software ecosystem continued to gain momentum with
Microsoft's release of Windows(r) Server 2003 x64 Edition and Windows XP
Professional x64 Editions, both developed in close collaboration with
AMD.

* The Dual-Core AMD Opteron processor took "Best of TechEd 2005" honors
conferred by Windows IT Pro and SQL Server Magazine at Microsoft TechEd
2005, and Network Magazine named the Dual-Core AMD Opteron processor
"Breakthrough Product" for 2005 at the Network Magazine Innovation
Awards.

* SAGEM announced the SAGEM myX-8 mobile phone using the Spansion(tm)
S29GL512N Flash memory device - the industry's only single-chip
512Mbit NOR Flash memory device in production.

CURRENT OUTLOOK

AMD's outlook statements are based on current expectations. The
following statements are forward looking, and actual results could
differ materially depending on market conditions.

* AMD expects microprocessor sales growth to exceed normal seasonal
patterns.

* Because of Spansion's SEC Form S-1 filing, AMD is not providing
guidance for the Flash memory business.


AMD Teleconference

AMD will hold a conference call for the financial community at 2:30 p.m.
PT today to discuss quarterly 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 or http://www.streetevents.com.
The webcast will be available for 10 days after the conference call.

CAUTIONARY STATEMENT

This release contains forward-looking statements concerning the fiscal
quarter ending September 25, 2005, which are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of
1995. Investors are cautioned that the forward-looking statements in
this release involve risks and uncertainties that could cause actual
results to differ materially from the company's current expectations.
Risks that the company considers to be the important factors that could
cause actual results to differ materially from those set forth in the
forward-looking statements include the possibility that global business
and economic conditions will worsen resulting in lower than currently
expected sales in the third quarter of 2005; that Intel Corporation's
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 processor sales plans; that
demand for computers, and, in turn, demand for the company's processors
will be lower than currently expected; that adoption of AMD64 products
by OEMs will not continue to occur as expected; that demand for the
company's Flash memory products will be lower than currently expected;
that Intel Corporation's pricing, marketing programs, product bundling,
new product introductions or other activities will negatively affect NOR
Flash memory prices; that OEMs will increasingly choose NAND-based Flash
memory products over NOR-based Flash memory products for their
applications; that customer acceptance of MirrorBit technology will not
continue to increase; that the company may not achieve its current
product and technology introduction or implementation schedules; that
the company will not be able to raise sufficient capital to enable it to
establish leading-edge capacity to maintain its market leadership
positions and that solutions providers will not timely provide the
infrastructure to support the company's AMD64 technology. 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 Annual Report on Form 10-K for the year ended December
26, 2004 and the Quarterly Report on Form 10-Q for the quarter ended
March 27, 2005.

ABOUT AMD

AMD (NYSE:AMD) designs and produces innovative microprocessors, Flash
memory devices and low-power processor solutions for the computer,
communications and consumer electronics industries. AMD is dedicated to
delivering standards-based, customer-focused solutions for technology
users, ranging from enterprises and governments to individual consumers.
For more information visit http://www.amd.com.

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