AMD Posts Profit in Quarter

Chip maker Advanced Micro Devices Inc. on Wednesday posted its second quarterly profit in a row, reversing more than two years of losses as demand has grown for its high-end microprocessors.

Sunnyvale, Calif.-based AMD earned $45 million, or 12 cents a share, in its second quarter ended March 28, up from a loss of $146 million, or 42 cents, in the same quarter last year. Revenue rose 73% to $1.2 billion from $715 million the previous year.

Analysts surveyed by Thomson First Call had expected per-share earnings of 3 cents.

Profit was boosted by strong sales of AMD’s Opteron chip, a 64-bit microprocessor for the server computers that power large corporate networks. Hewlett-Packard Co. and Sun Microsystems Inc. began shipping Opteron-based servers during the quarter, joining IBM Corp., Fujitsu Siemens Computers and others already using Opteron.

Unlike the 64-bit chip sold by archrival Intel Corp., AMD’s Opteron is compatible with slower 32-bit systems. Sixty-four-bit chips process data in chunks twice as large as 32-bit systems.

Sales were also strong in flash memory chips, used to store data when devices such as cellphones and hand-held computers are turned off.

AMD ate into Intel’s share of the flash memory market after Intel raised prices and was dropped as a supplier by cellphone maker Nokia Corp., which switched to AMD.

“The numbers look solid,” said Eric Gomberg, an analyst with Thomas Weisel Partners. “The company showed a somewhat better-than-expected top line and was able to show better margin improvement than they have in a couple of quarters.”

AMD shares slipped 4 cents to $17.12 on the New York Stock Exchange. They rose to $17.50 in after-hours trading, after the earnings announcement.

Reuters was used in compiling this report.