Intel inches ahead of AMD in chip war

Processor arch-rivals post drastically different results for the first quarter of the year.

Intel has exceeded analyst expectations for the first quarter of first quarter of the year. 1999, while arch-rival AMD has confirmed that it made a loss for the same period.

For the three months ended 27 March, Intel reported revenue of $7.1 billion, up 18 per cent from its $6 billion turnover last year, and profit of $2 billion, or $0.57 a share, up 57 per cent from $1.3 billion, or $0.36 per share, for the first quarter of 1998.

The chip giant's turnover and profit were down from the last quarter of 1998, with revenue dropping seven per cent from $7.6 billion and net income down three per cent from $2.1 billion. The results have been attributed to the seasonal cycle rather than any signs of a significant slowdown in PC sales. The move comes after Compaq's warning last week that its profit would be down due to lower than anticipated market sales and competitive pricing.

Craig Barrett, president and chief executive of Intel, said: 'We are pleased with our substantial year-on-year growth in profitability resulting from our cost-control efforts. We are seeing positive results from the launch of products across all sectors.'

In contrast to this, rival AMD's first-quarter results showed a significant loss. Turnover of $631.6 million and net loss of $128.4 million, or $0.88 per share, were in line with the profit warning it issued last week (PC Dealer, 14 April). The figures were an improvement on last year's results but were significantly lower than last quarter.

'The best thing that can be said about the first quarter is that it's over,' said Jerry Sanders, chairman and chief executive of AMD. 'The significant decline in revenue was almost entirely due to AMD K6-2 microprocessor yields.'

AMD claimed to have solved its production problems and plans to ship five million units this quarter.