AMD REPORTS SECOND QUARTER RESULTS
- AMD earns a record $207 million, or $1.21 per diluted share after taxes,
on record quarterly sales up by 97 percent from second quarter of 1999-
SUNNYVALE, CA -- July 19, 2000 -AMD today reported record sales of
$1,170,437,000, record operating income of $250,197,000, and record net
income of $207,142,000 for the quarter ended July 2, 2000. Operating income
rose by 38 percent from the immediate-prior quarter. Net income amounted to
$1.21 per diluted share after a 20 percent tax rate. (On an untaxed basis,
second-quarter earnings per diluted share would have been $1.51, up by 31
percent from the first quarter when the tax rate was zero.)
Sales grew by 7 percent from the immediate-prior quarter, for which
AMD reported sales of $1,092,029,000, operating income of $180,669,000, and
net income of $189,349,000, or $1.15 per diluted share.
Sales nearly doubled from the second quarter of 1999, for which AMD reported
sales of $595,109,000 and net income of $79,896,000, or $0.53 per diluted
share. Revenues from PC processors and flash memory products each more than
doubled from the comparable quarter of 1999. The results for the second
quarter of 1999 included a one-time, after-tax gain of $259 million from the
sale of Vantis Corporation, the company's former programmable logic
subsidiary. The results from the second quarter of 1999 also included 11
weeks of operating results from Vantis prior to the effective date of the
sale. In the second quarter of 1999, AMD incurred an operating loss of
For the first six months of 2000, AMD reported total sales of $2,262,466,000
and net income of $396,491,000, or $2.36 per diluted share. For the same
period of 1999, AMD reported total sales of $1,226,702,000 and a net loss of
$48,471,000, or a loss of $0.33 per share, including the gain on the sale of
Vantis and restructuring and other special charges.
"AMD had another great quarter," said Hector de J. Ruiz, president
and chief operating officer of AMD. "Strong revenue growth in both of
principal product lines - PC processors and flash memory devices - again
resulted in record sales and earnings."
In what is traditionally the weakest quarter for PC processors, the company
reported that combined unit shipments of AMD Athlon, AMD Duron, and AMD
K6-2* processors remained near record levels at well in excess of 6 million
"During the quarter, AMD introduced two enhanced seventh-generation PC
processors," said Ruiz. "The new AMD Athlon* processor, formerly
'Thunderbird,' features 256K of on-die L2 cache memory and is targeted at
the performance sector of the PC market. AMD also commenced shipments of the
AMD Duron* processor, formerly code-named 'Spitfire,' featuring 64K of
on-board L2 cache memory. The AMD Duron processor is targeted at the value
segment of the PC market.
"Demand for AMD processors remains strong. Combined unit sales of
AMD seventh-generation processors - the AMD Athlon and AMD Duron processors
- increased by 52 percent over the immediate-prior quarter to more than 1.8
million units, meeting our previously stated goal. We are especially pleased
at the strong support we have received from our infrastructure partners
during the transition to the newest version of the AMD Athlon processor
family. With the additional production capacity of our new Dresden facility,
we believe we are on target to double unit shipments of AMD
seventh-generation processors in each of the next two quarters to 3.6
million units in the third quarter and to 7.2 million units in the fourth
quarter," said Ruiz.
Ruiz noted that AMD successfully met a number of important
challenges in the just-completed quarter. "We achieved our goal of
increasing AMD seventh-generation processor unit shipments by 52 percent
sequentially while making a successful transition to our newest AMD Athlon
and AMD Duron products. During the quarter, we converted all AMD Athlon
processor production to the new version, featuring on-chip L2 cache memory.
Fab 30 in Dresden transitioned to production status, completing an excellent
start-up phase employing our most advanced process technology - 0.18-micron
technology using copper interconnects. We are rapidly ramping production in
Fab 30, and to date we have met or exceeded every milestone along the
"Our progress in flash memory was equally successful. Memory Group
sales grew by more than 10 percent over the immediate-prior quarter,"
"During the quarter, AMD introduced two advanced flash memory products
high-end cellular telephones. Working closely with Nokia, AMD developed 32-
and 64-megabit devices with simultaneous read-write architecture and
1.8-volt operation for extended battery life. These features are critical in
adding new capabilities to cellular telephones, such as Internet
connectivity, video streaming, and the functionality of handheld information
"Demand for AMD flash memory products continues to exceed our production
capacity," said Ruiz. "We are adding capacity as rapidly as
support our customers. During the quarter Fujitsu AMD Semiconductor Limited
(FASL) made initial shipments from a production facility in Iwate, Japan,
and qualified production in additional facilities in Aizu-Wakamatsu and
Gresham, Oregon. As announced earlier today, FASL broke ground for
construction of a third megafab for flash memory production at
Aizu-Wakamatsu, Japan. Initial production at this new facility, designated
JV3, is planned to commence in the second half of 2001.
"Today we are reaping the rewards of AMD's sustained commitment to
in process technology, product development, and production capacity for both
PC processors and flash memory products. AMD has the strongest product
portfolio in its 31-year history, with industry-leading products for our
target markets. We have excellent relationships with leading customers
around the world, and we continue to operate in a favorable market
environment. During my first six months at AMD, I have been very favorably
impressed with the dedication of the AMD workforce and the total commitment
to success that permeates the company," Ruiz concluded.
The company's outlook statements are based on current expectations.
The following statements are forward-looking, and actual results could
Despite the loss of revenues as a result of the sale of the
Communication Products Division, AMD projects that sales will be higher in
the third quarter than in the immediate-prior quarter. The company's current
overall outlook is based on the following projections for its major product
The company projects that combined unit shipments of AMD Athlon and Duron
family processors will increase to 3.6 million units in the third quarter
and to 7.2 million units in the fourth quarter, resulting in a richer mix
and a higher blended average selling price and higher revenues for PC
AMD projects that Memory Group sales will grow in the 10 percent range in
the third quarter and will achieve a similar growth rate in the fourth
quarter. The company projects that demand for flash memory products will
continue to exceed supply.
AMD will hold a teleconference for the financial community at 2:30
PM Pacific Daylight Time today to discuss second-quarter financial results.
AMD will provide a real-time audio broadcast of the teleconference on the
Investor Relations page of its web sit at http://www.amd.com or
http://www.streetfusion.com. The webcast will be available for two weeks
after the teleconference.
AMD will also provide a telephone recording of the teleconference,
which will be available at approximately 4:30 PM PT today. Interested
persons may listen to the playback of the teleconference by calling the
following toll-free number: 1-800-633-8284 and entering the code number
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. There can be no assurance that
demand for the company's products will continue at current or greater
levels, or that the company will continue to grow revenues, operating
profits, or earnings.
There are also risks that the company will not be able to produce the AMD
Athlon and AMD Duron processors in the volume, speed mix or with the feature
set necessary to meet customer requirements and the company's plans and
goals; that Intel Corporation pricing, marketing programs, new product
introductions or other activities targeting the company's processors
business will prevent attainment of the company's current processor sales
plans; that third parties may not provide timely or adequate infrastructure
solutions to support the AMD Athlon and AMD Duron processors; and that the
company will not be able to grow demand for its PC processors sufficiently
to utilize fully its processor production capacity. 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 26, 1999.
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 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 $2.9 billion in 1999. (NYSE: AMD).
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