AMD revenue, profit inched up in Q1
April 21 2011
AMD posted gains in both revenue and profit in the first quarter, citing lower prices but higher unit sales of microprocessors compared with a year earlier.
The chip maker announced Thursday that its revenue was US$1.61 billion, up 2 percent from the first quarter of last year. Its net income reached $510 million, or $0.68 per share, up from $257 million, or $0.35 per share, a year earlier.
Excluding certain items, the company posted net income of $56 million, or $0.08 per share, a figure that beats the $0.05 consensus forecast of analysts polled by Thomson Reuters. The company's revenue matched the analysts' forecast.
However, AMD said Monday that it expects its revenue to be flat or down sequentially in the second quarter of 2011.
The first quarter marked the commercial debut of AMD's first Fusion APU (accelerated processor unit) for laptops, code-named Llano, which the company said incorporates the kind of graphics capability available from separate graphics chips.
Llano will begin shipping in large volumes in this quarter, according to Thomas Seifert, the company's interim CEO, on a conference call following the earnings announcement. AMD will be aiming the chip at the third-quarter back-to-school season, he said. However, AMD expects its market share in desktops and laptops to remain about the same this year, he said.
Even though the Fusion APU architecture includes powerful graphics processing, AMD expects sales of its discrete graphics chips to remain steady or possibly gain. Dedicated graphics chips will still be used in PCs with lower-end CPUs, and some higher-end laptops will probably ship with both an APU and a separate graphics chip, the company said. AMD expects the overall PC market to grow about 11 percent this year.
A more urgent area of focus is servers, which AMD will target with an upcoming line of processors code-named Bulldozer. The company has stabilized its server market share, but it is still only about 6.6 percent of the market, a level that is "borderline" profitable, Seifert said. Bulldozer chips are set to start shipping for desktop systems in the early summer and for servers in the late summer, and they should boost revenue and market share in the third and fourth quarters, he said. The new server chips should make AMD profitable in servers, Seifert said. Bulldozer chips will bring significant gains in many areas, including floating-point performance, I/O throughput and performance per watt, according to AMD.
AMD is also looking toward tablets, working with more than one system vendor on future products, Seifert said, though he added that it was too early to discuss them.
"That is an exciting form factor for us, and we have a lot of (intellectual property) that is going to play nicely in this field," Seifert said.
The company is continuing its search for a permanent CEO and interviewing candidates, but it has not set a target date for hiring one, Seifert said. CEO Dirk Meyer resigned in January, followed by several other executives who left in what analysts called an internal cleanup as AMD searched for a new leader.
The company is holding expenses in check, surpassing its own cost-cutting target in the first quarter, according to Seifert. Operating expenses were below AMD's guidance of $650 million in the quarter, and its guidance for the second quarter is $620 million.
"I would very much expect that our revenue outgrows our operating expenses" for the full year, Seifert said.
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