AMD Astonishes

"This was another record-breaking quarter for AMD's microprocessor business," AMD CFO Robert Rivet said. "Exceptional customer demand for our server, mobile and desktop processors helped drive microprocessor sales growth of 44% compared to the third quarter of 2004, and 26% compared to the second quarter of 2005.

"We established new quarterly records in unit and dollar sales, gross margin and operating income," the CFO said.

AMD said it expects fourth-quarter microprocessor sales to grow between 7% and 13% sequentially, which represents a year-over-year increase of 42% to 50%. The company did not provide guidance for its flash memory business, called Spansion, which it plans to spin off in a public offering.

The company generated record operating income of $209 million and sales of $969 million within its computation products group, which includes PC, server and laptop chips and chipsets.

In the previous quarter, this unit posted a $100 million operating profit on sales of $767 million; a year ago it posted an operating profit of $89 million on $673 million in sales.

The unit's operating margin came in at about 21%, breaking the 20% barrier for the first time ever.

AMD more than doubled its sales to large, global PC makers from a year ago, while record processor sales were the result of a 72% sequential increase in sales of AMD Turion 64 mobile processors.

The company also cited strong sales in such high-growth markets as Russia, India and China.

AMD's memory group lost $50 million on sales of $516 million in the third quarter vs. an operating loss of $90 million on sales of $462 million in the second quarter.

Shares of AMD, which were halted in advance of the earnings announcement, closed up 89 cents, or 3.4%, at $23.29; shares recently edged up 26 cents to $23.55 in after-hours trading.

>To order reprints of this article, click here: Reprints