Updated from 9:49 a.m. EDT Underdog chipmaker Advanced Micro Devices ( AMD) blew past first-quarter estimates Wednesday, posting a 73% year-over-year increase in sales. Still, shares of AMD sank Thursday, recently down $1.12, or 6.5%, to $16.00. Wall Street analysts responded to the first-quarter report by ratcheting up estimates but still expressed concerns about the company's balance sheet and the stock's valuations. Deutsche Bank analyst Ben Lynch noted that AMD's 2005 price-to-sales multiple of 1.0 may appear attractive. But with net debt of $1 billion -- 17% of the company's market cap as of Wednesday's close -- the enterprise-value-to-sales ratio increases 44%. "In addition, despite a solid turnaround strategy, we struggle to see how AMD will generate through-cycle positive returns and free cash flow in the long term," Lynch wrote. (He has a hold rating on the stock and his firm has done banking with AMD.) CIBC World Markets analyst Allan Mishan was even more negative, although he raised his estimates, too. "We do applaud AMD for gaining share in the flash memory business," he wrote in a note Thursday morning. But "we continue to believe AMD has little market power, faces a tough 2004 in the PC processor business, and may have run out of flash share gains for the time being." Mishan, who has a sector underperformer rating on AMD, noted the stock's price-to-earnings multiples of 31 times 2004 earnings and 24 times 2005 earnings are "hardly bargain prices." They reflect the market's belief that AMD will either post faster revenue growth in 2006 and beyond or improve its operating margins; both could happen, Mishan said, but that doesn't justify the stock price. (CIBC hasn't done banking with AMD.) After the bell Wednesday, AMD posted a first-quarter profit of $45.1 million, or 12 cents a share. That reversed a net loss of $146.4 million, or 42 cents a share, in the same period a year earlier and far surpassed the 4-cents-a-share consensus estimate gathered by Thomson First Call. AMD's first-quarter sales totaled $1.236 billion, up 73% from a year ago. That also beat the consensus estimate of $1.175 billion.