SUNNYVALE, Calif. -- Citing strong growth in the microprocessor and flash-memory chip segments, Advanced Micro Devices Inc. here today reported record sales and earnings for the third quarter, ended Oct. 1. But AMD faces some capacity issues going forward, prompting the company to announce that it will be sold out of its Athlon processor and flash-memory lines during the fourth quarter of 2000.
In the third quarter, meanwhile, AMD reported sales of $1.2 billion, an 82% increase from revenues of $662.2 million reported in the same period last year. The company posted a net of $408.6 million, or $1.18 per share, for the period, compared to a deficit of $105.6 million, or a loss of $0.36 per share, a year ago.
The third-quarter results included a one-time gain of $336.9 million resulting from the sale of part of its communications-chip business, which was recently spun-off into an independent company called Legerity Inc.
But still, AMD topped industry forecasts. It was expected to post earnings of $0.62 a share, or approximately $212 million,according to First Call/Thomson Financial.
The company attributed the growth to strong demand for its core microprocessor products. "In a tougher market than anticipated, AMD achieved record PC processor revenues on record unit sales, which were up more than 50% year-on-year and 10% sequentially," said W.J. Sanders III, chairman and chief executive officer of AMD.
"We continued our excellent operational execution and met our aggressive goal of sequentially doubling combined AMD Athlon and AMD Duron processor sales to more than 3.6 million units," Sanders said.
It also reported strong demand for flash-memory products. "Sales growth was led by continuing extraordinary demand for AMD flash memory devices, whose sales more than doubled over the same period of 1999 and grew by 17% sequentially on record unit sales," he said.
"Demand for AMD flash memory products continues to exceed supply," he added." Demand also continues to be broadly based, reflecting strength in cellular telephones, set-top boxes, automotive applications, Internet infrastructure products, and mobile Internet appliances."
In the future, however, AMD faces one problem: lack of capacity. In the fourth quarter, for example, the company said it expects to "sell out" of its Athlon processor line, according to AMD.
For the year, it expects that total sales of PC processors will easily exceed earlier projections of 25 million units, with the final tally projected to be approximately 28 million units, compared to last year's 18.8 million units.
It also projects that demand for AMD flash memory products will continue to exceed supply for the foreseeable future.
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