SAN FRANCISCO: No 2 chipmaker Advanced Micro Devices Inc. posted strong fourth quarter profits Wednesday even as it acquired more market share and forecast an exceptional first quarter.
The Sunnyvale, California-based company said its first quarter sales are expected to rise by 70 per cent from the year earlier period as it perceives strong demand for its chips for server, notebook and desktop computers.
The company had a net profit of $95.6 million for the fourth quarter, or 21 cents a share, compared with a loss of $30 million, or 13 cents a year earlier. Its revenue was up 45 per cent to $1.84 billion.
Analysts had forecast 27 cents-a-share earnings on revenue of $1.65 billion.
AMD said excluding a non-cash charge of $110 million on account of the flash memory unit Spansion Inc.'s IPO, it would have earned 45 cents a share.
In the fourth quarter, AMD's core processor business had sales of $1.3 billion, up 79 per cent from a year earlier and 35 per cent from the third quarter. It said it had increased its market share to 15.3 per cent at the end of 2005, up 3.4 percentage points from three months earlier.
Analysts say chief executive officer Hector Ruiz's strategy in giving up undercutting rival Intel on prices and instead concentrating on expensive chips for servers and laptops, seems to have yielded results.
The company has been steadily catching up with Intel, whose fourth quarter income and revenue announced Tuesday had disappointed investors, who pulled down its stocks by 11 per cent. AMD's shares were up 4 per cent at $34.15. In extended trading, it went up another 10.8 per cent to close at $37.85.
While its revenue is one-sixth of Intel's, industry watchers are of the opinion that its microprocessors offer better performance and savings on power.
Posted
on : Thu, 19 Jan 2006 08:30 GMT | Business News
By : Mark Richardson
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