"Q1 was a great start to the new millenium at AMD," chairmand and CEO W.J. Sanders III told analysts during a Wednesday afternoon conference call. "This was particularly for our PC processor business."
Strong sales of its high-performance Athlon chips helped AMD earn $189.3m (£119.07m), or $1.15 a share, on sales of $1.09bn.
First Call consensus expected the chipmaker to earn 58 cents a share in the quarter.
More than 6.5 million PC processors shipped in the first quarter, Sanders said during an afternoon conference call with analysts. Strong demand from the mobile PC market boosted K6 unit shipments to more than 5 million; AMD claimed more than 50 percent market share for portable PCs in the US retail market. AMD's flagship Athlon processor saw more than 1.2 million shipments, a 50 percent improvement from the fourth quarter.
AMD expects Athlon to see 50 percent sequential unit growth in the second quarter to more than 1.8 million. The company is trying to increase its K6 output to beyond the 4 million originally planned for the second quarter, Sanders said.
Price shouldn't be a problem, he added. AMD's overall average selling price for PC processors rose nearly 10 percent from the fourth quarter. "We have every opportunity to approach a $100 selling price in the second half of the year," Sanders said. "We think the PC market is strong, and we see it as getting stronger. ... So we don't think price is an issue, actually."
The company is pinning its future growth on the Thunderbird and Spitfire versions of the Athlon. Both product lines will begin shipping in production volumes in June, Sanders said. AMD's original goal of shipping more than 25 million processors this year -- more than half coming from Athlon -- "could prove conservative," Sanders said.
Higher speed versions of Intel's Celeron chip shouldn't present a problem, he said.
"Relative to competing with the so-called Coppermine version of Celeron ... we believe that we'll be able to compete very favourably to that with our Spitfire product, and actually outperform them clock for clock," Sanders said. "So we're not relying on any K6 volume in the second half of the year."
Slot versions of the Thunderbird chip will hit the market first, followed by Socket versions in the third quarter, Sanders said. All Spitfires will be Slot chips.
AMD foresees "hundreds of thousands" of Athlon chips shipping in 900 megahertz, 950MHz and 1GHz versions in the second quarter. The company remains confident in its goal of reaching 1.5 ghz by January, Sanders said.
On the expense side, AMD predicted marketing, general and administrative costs, along with R&D, in the second quarter. MG&A would range between $600m and $625m in the second quarter, executives said. AMD sees $800m in capital spending in fiscal 2000, with more than half of that for the Dresden plant.
The $1.09bn in sales marks a stellar 73 percent improvement compared to the year-ago quarter when it lost $128.3m, or 88 cents a share, on sales of $631.6m.
Company officials said unit sales of Athlon chips jumped 50 percent to 1.2 million units. Total chip sales improved 14 percent from the fourth quarter and 65 percent from the year-ago quarter.
Ahead of the earnings report, AMD shares closed off 7 1/8 to 63 1/2.
Last week, AMD told Wall Street to expect sales in excess of $1bn.
AMD's flash-memory unit reported sales of $327m in the quarter, up 150 percent from the year-ago quarter. Its communications unit sales jumped 59 percent from the year-ago quarter.
Communications group revenue should see double digit sequential growth in the second quarter, on a percentage basis, executives said. Flash memory revenue -- which rose 19 percent from the the fourth quarter and two and a half times year-over-year -- is expected to growth by high single digit percentages in the second quarter as AMD ramps production to meet surging demand. Executives expect flash memory to return to double digit percentage group in the third quarter.
While the rest of the booming worldwide semiconductor industry is projecting sales growth of between 20 percent to 25 percent this year, AMD now says its total sales will improve by more than 50 percent.
Last quarter, AMD shattered analysts' estimates, earning $65m, or 43 cents a share, on sales of $969m.
Its shares soared up to a 52-week high of 79 3/16 earlier this month after falling to a low of 14 9/16 last April.
Fifteen of the 22 analysts tracking the stock maintain either a "buy" or "strong buy" recommendation.
If AMD's new processor can outperform Intel's then a fuzzy name will be a nice bit of icing on the cake -- if they can't, I really doubt that warm and cuddly branding will make a bit of difference. Go with Guy Kewney to AnchorDesk UK for the news comment.
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