AMD Comes Out Ahead on Revenue and Earnings Estimates

Advanced Micro Devices (AMD Quote) delivered on its first-quarter promises, reminiscent of archenemy Intel's (INTC Quote) Tuesday report.

The chipmaker predicted in January that it would fall back 5% to $900 million in revenue during the seasonally slow quarter, but vowed to charge ahead in the second half of the year to 20% sales growth. Despite slightly skeptical Wall Street forecasts of $891 million, according to Multex.com, AMD turned in the promised amount and some spare change, with $902 million in sales. That amount represented a 24% year-over-year drop in revenue and a 5% decline from a stronger-than-expected fourth quarter of 2001. Intel, in ramping up its new Pentium 4 chip, saw revenue lapse 3% sequentially from the fourth to the first quarter.

AMD reported a loss of $9 million, calculated according to generally accepted accounting principles (GAAP), or 3 cents a share. Analysts were expecting a wider 7-cents-a-share shortfall. Rather than expanding its losses from the fourth quarter's nickel-a-share deficit, AMD used cost-cutting to improve its results.

The upstart planned to keep unit shipments flat sequentially at 7.8 million, but bested its fourth-quarter effort with 8 million PC chips sold. The company felt confident enough to reiterate its guidance in late February, and was able to secure a slight improvement in the final months of the quarter.

In the coming quarter, AMD plans to see further seasonal slowing as shipments fall 5% to 10% and revenue either remains flat or falls 10%. AMD's wide range of guidance reflects its continued uncertainty regarding the economic rebound and levels of technology spending.