Net income and gross margin growth driven by increased AMD64 processor demand

@ 2004/10/07
SUNNYVALE, Calif., Oct 7, 2004 (BUSINESS WIRE) -- AMD (AMD) today reported sales of $1.239 billion and net income of $44 million for the quarter ended September 26, 2004. Net income amounted to $0.12 per diluted share.

Third quarter sales increased by 30 percent compared to the same period in 2003 and decreased by two percent from the second quarter of 2004. In the third quarter of 2003, AMD reported sales of $954 million and a net loss of $31 million, or $0.09 per share. 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.

"Our third quarter net income improvement was largely driven by a 21 percent sequential increase in Computation Products Group (CPG) sales and improved gross margin in the Memory Group," said Robert J. Rivet, AMD's chief financial officer. "AMD64 processor sales represented over one-third of our total CPG sales. Sales growth was driven by both higher average selling price (ASP) and increased unit volumes.

"The successful transition to 110nm technology and excellent cost management allowed the Memory Group to remain profitable despite weaker than expected sales into the wireless handset market."

ADDITIONAL HIGHLIGHTS OF THE QUARTER

-- Twenty-five percent of the Fortune Global 100 companies now
use AMD Opteron(TM) processor-based systems to run critical
enterprise applications. These organizations include industry
leaders in banking, insurance, pharmaceuticals, manufacturing,
energy and telecommunications.

-- New AMD Opteron processor-based server customers include AOL,
Merrill Lynch, Bell Helicopter, Sabre Holdings, BNP Paribas,
E! Networks, Fox Sports, and Agere Systems.

-- AMD Opteron processor-based servers and workstations are
providing the digital backbone for Star Wars Episode III:
Revenge of the Sith. The AMD64 digital processing pipeline at
JAK Films includes pre-visualization and pre-postproduction,
which involves 3-D match moving, 3-D modeling, lighting,
shading, texturing, compositing and rendering techniques.

-- AMD demonstrated the industry's first x86 dual-core processor
on 90nm process technology. HP, IBM and Sun Microsystems,
among others, announced support for AMD's dual-core
technology.

-- As an official sponsor and technology partner to Scuderia
Ferrari and the USPS Pro Cycling Team, AMD helped make history
as Ferrari secured an unprecedented 14th Formula One
Constructors' title and Michael Schumacher secured a record
7th Drivers' World Championship, while Lance Armstrong became
the world's first six-time Tour de France winner.

-- AMD launched the new AMD Sempron processor family, which
redefines everyday computing for value-conscious buyers of
desktop and notebook PCs. Acer, HP and Lenovo are among the
initial leading OEMs to offer AMD Sempron processor-based
systems.

-- VMware ESX Server, a leading virtual infrastructure software
application that enables enterprises to partition and manage
systems in mission-critical environments, was qualified on AMD
Opteron processor-based systems from HP and IBM.

-- With the release of Microsoft(R) Windows(R) XP Service Pack 2,
Enhanced Virus Protection can be enabled on all AMD Athlon 64
processors, the first PC processors to offer an enhanced level
of security against certain viruses.

-- AMD introduced the Mobile AMD Athlon 64 processor 3000+ for
thin-and-light notebooks, and the highest performing
32-bit/64-bit processors available for mobile PCs, the AMD
Athlon 64 processor 3700+, for desktop-replacement notebooks.

-- Spansion completed its transition to 110nm technology at Fab
25 in Austin, Texas.

-- AMD established a Greater China headquarters in Beijing.

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