AMD does better than expected

Unable to deliver sufficient stocks, AMD still manages to surprise analysts. Mike Magee reports.

US-based Advanced Micro Devices (AMD) reported a fourth-quarter lossnalysts. Mike Magee reports. which was less than US analysts had anticipated after the chip manufacturer experienced a late surge in demand.

In the quarter ended 28 December 1997, AMD reported a net loss of $12.3 million and sales of $613 million. Revenue increased by three per cent from the last quarter. Figures for the same period last year showed a turnover of $496.8 million and a net loss of $21.2 million.

But the results showed the losses are associated with the inability of AMD to deliver enough K6 chips to PC manufacturers.

Jerry Sanders, CEO and chairman of AMD, admitted: 'Although we increased unit production substantially (in our fourth quarter), yields continued to be disappointing.'

He added: 'Sales of K6 processors increased by 26 per cent over the previous quarter to $190 million. Unit shipments increased by 50 per cent to 1.5 million units.'

Wall Street had expected AMD to report a loss of 14 cents a share for the fourth quarter but the company instead reported a nine cents a share loss.

The figures also indicated that other parts of AMD's business, manufacturing, communications and programmable logic, remain profitable.The company also highlighted the fact that its flash memory sales increased during a period of intense competition.

Last week, Compaq and IBM said they would use K6 chips, meaning that those firms, at least, are confident that supplies will improve throughout 1998.

Sales of AMD's K6 processor increased by 26 per cent from the previous quarter, which represented $190 million. Unit shipments of the K6 processors increased by 50 per cent to 1.5 million units.