Advanced Micro Devices Leaves Profit Forecasts in the Dust
Advanced Micro Devices Inc. reported quarterly profit that blew past even the highest analyst forecasts as it beat Intel Corp. with faster computer microprocessors.
First-quarter net income reached $189.3 million, or $1.15 a share, in its turnaround from an operating loss of $118.8 million, or 81 cents, a year ago, Advanced Micro said. Analysts had expected earnings of 57 cents, with the highest forecast at 65 cents, according to First Call/Thomson Financial.
Sales climbed 73% to $1.09 billion as the company improved manufacturing and chip design to challenge Intel with speedier Athlon processors and more of them. The company was able to sell more expensive chips than expected, which boosted average selling prices. Surging sales of cell phones and electronic devices boosted demand for flash-memory chips.
Advanced Micro said it expects second-quarter sales to top those in the first quarter as it ships 1.8 million Athlon processors and average selling prices increase.
The Sunnyvale, Calif.-based company said April 5 that sales had topped $1 billion, pushing its shares up 11%. The stock touched a record $79.19 on Monday and has more than doubled this year. AMD shares rose $5.38 to close at $76 on the New York Stock Exchange before the earnings were released.
In February, before Advanced Micro first boosted its outlook for first-quarter results, analysts expected profit of 32 cents.
At a Glance
Other earnings, excluding one-time gains or charges unless noted, include:
* Acclaim Entertainment Inc. said its loss widened to $19 million, or 34 cents a share, from $14.5 million, or 21 cents, a year ago, well beyond the 27 cents analysts forecast. The video-game software maker’s revenue fell 51% to $65.9 million.
* Check Point Software Technologies Ltd. posted a 77% jump in first-quarter earnings to $34.9 million, or 40 cents a share, beating analyst estimates of 35 cents, as revenue rose 79% to $78.2 million. Demand for Check Point’s security software rose as more companies moved their business online and as saboteurs disrupted Web operations at popular sites.
* Hughes Electronics Corp., the biggest maker of satellites, said its loss widened in the first quarter to $108.3 million from $11.1 million a year earlier as depreciation and amortization costs rose. Revenue climbed 85% to $1.7 billion, fueled by sales of its DirecTV satellite-television service. Hughes, a unit of General Motors Corp., didn’t provide per-share equivalents and said both periods exclude a satellite-manufacturing business that was sold to Boeing Co. in January. Operating costs and expenses nearly doubled to $1.77 billion, Hughes said.
* Rambus Inc., which licenses its patents to make faster computer chips, reported operating income of $4.9 million, or 15 cents a share, compared with profit of $2 million, or 8 cents, a year ago. Analysts had forecast 14 cents, according to First Call/Thomson Financial. The latest results exclude one-time charges and a payment for payroll taxes. The company said the earnings report was not prepared in accordance with generally accepted accounting principles. Revenue rose 59% to $15.7 million.
* Redback Networks Inc., a maker of equipment that eases bottlenecks on telecommunications networks, said it earned $5.61 million, or 5 cents a share, excluding acquisition and other costs, beating analyst estimates of 3 cents. The company had a loss of $2.72 million, or 16 cents, a year ago. Sales soared fivefold to $34.2 million from $6.52 million.
* Seagate Technology Inc., the world’s largest maker of computer disk drives, beat analysts’ expectation with a 61% drop in fiscal third-quarter profit to $46 million, or 20 cents a share, as sales fell 13% to $1.57 billion. Analysts were expecting a 69% drop to 15 cents a share, according to First Call/Thomson Financial.
* Terayon Communication Systems Inc., maker of modems for cable-TV lines, reported a first-quarter profit of $1.89 million, or 6 cents a share, compared with a loss of $4.28 million, or 23 cents, excluding acquisition-related and other costs. Revenue surged to $59.3 million from $15.9 million.
* Women.com Networks Inc. said its loss narrowed in the first quarter to $7.6 million, or 16 cents a share, beating analyst forecasts of a 19-cent loss, as revenue quadrupled. In the year-earlier quarter, Women.com had a loss of $8.9 million, or 33 cents. Revenue soared to $14.4 million from $3.41 million as traffic to the network of sites rose more than 60% and membership more than tripled to 2.9 million people.
Meanwhile, Hearst Corp. told the Securities and Exchange Commission it may buy up to 1 million additional shares of Women.com. The privately held media conglomerate now holds a 46.8% stake, or 21.8 million shares, in the company.
