Bolstered by surging sales of its speedy Athlon chips,

Advanced Micro Devices

(AMD) - Get Report

vaulted over Wall Street's earnings expectations Wednesday, reporting profits that were nearly double the high end of analysts' forecasts.

But

Rambus

(RMBS) - Get Report

, a company backed by AMD's chief rival,

Intel

(INTC) - Get Report

to develop technology to speed up computer memory chips, reported a huge second-quarter loss because of acquisition costs and other expenses.

The two chip companies' financial reports, released after the stock market closed, set off two opposite reactions in after-hours trading, as AMD's stock jumped, while the highflying shares of Rambus plunged.

AMD of Sunnyvale, Calif. said net income for the quarter surged to $189.3 million, or $1.15 cents a diluted share, compared with a loss of $128.4 million, or 88 cents a share in the year-earlier period. Analysts had been expecting earnings of 53 cents to 58 cents, according to surveys taken by

I/B/E/S International

and

First Call/Thomson Financial

, respectively.

Revenues for the quarter rose 73%, to $1.09 billion, crossing the $1 billion mark for the first time.

"AMD had the best quarter in its history," W.J. Sanders III, AMD's chairman and chief executive, said in a statement. "Each of our product groups reported significant growth in the first quarter."

The company said sales of its Athlon processors rose 50%, to 1.2 million units, while total PC processor revenues jumped 65% in the first quarter.

Meanwhile, Rambus, of Mountain View, Calif., said it lost $166.8 million, or $6.98 a diluted share, in its second-fiscal quarter, compared with earnings of $2.01 million, or 8 cents a share, in the year-earlier period. It attributed the loss to noncash and acquisition-related charges.

The company also reported pro forma earnings of $3.97 million, or 15 cents a share, one-time charges, compared with pro forma earnings of $2.01 million, or 8 cents a share, in the 1999 quarter. But Rambus also acknowledged that its pro forma results did not follow generally accepted accounting principles.

Revenues for the quarter rose 59%, to $15.7 million, Rambus said.

Rambus' pro forma earnings in the latest quarter exclude the effect of amortization of goodwill, other acquisition-related charges of about $230,000 and one-time employee compensation expenses of $171.1 million.

Analysts surveyed by First Call/Thomson Financial had been expecting Rambus to earn 14 cents a share in the latest quarter, but the extra penny in question did the company little good on Wall Street. According to

Instinet

, Rambus dropped 20 9/16, or nearly 10%, to 193 1/4 in after-hours trading. The late selloff continued Wednesday's downward spiral in which the stock lost 32 3/16, or 13%, to close regular trading at 213 13/16.

In contrast, AMD rose 5 1/2, or 8.5%, to 70 in after-hours trading, recouping nearly all of Wednesday's earlier losses. AMD had ended regular trading down 6 1/8, or 8.7%, at 64 1/2.

While AMD's earnings were strong, questions linger about the company's ability to continue maintaining its competitive edge. Demand for AMD's chips could dampen if the growth in personal computer sales slows, as the preference for non-PC Internet devices increases.

The anticipated release of Intel's high-speed Willamette process could also hurt AMD. Willamette is thought to be more powerful than any of AMD's previously released or soon-to-be-released microprocessors.

The company has also built a reputation for inconsistent earnings growth. In the first quarter of last year, AMD reported a huge loss of 88 cents a share in large part because of manufacturing problems that led to the production of defective chips.