AMD turns profit following jump in chip sales

Sales of AMD's microprocessor division increased nearly 80% from 2004

Intel's poor performance in the last three months of 2005 turned out to be good news for rival chipmaker Advanced Micro Devices (AMD) which reports better-than-expected financial results for the period. With sales of AMD's microprocessor division increasing nearly 80% from the previous year, the company reported revenue of US$1.84 billion (NZ$2.7 billion).

AMD's fourth quarter 2005 revenue was up 45% year-over-year, and the company went from losing US$30 million (NZ$44 million) during Q4 2004 to reporting a profit of US$96 million, or US$0.24 per share, during this most recent quarter. Excluding US$110 million in costs related to the initial public offering of AMD's Spansion flash memory division, the company's profit was $205 million (NZ$300 million) or $0.45 per share.

The revenue numbers were well ahead of Wall Street expectations. Analysts had expected revenue for the quarter to total US$1.67 billion (NZ$2.4 billion), according to a survey of 29 analysts by Thomson First Call.

Investors had been expecting good things from AMD. While Intel's (INTC) stock was down more than 11% Wednesday, closing at US$22.60 (NZ$33), AMD (AMD) shares rose by nearly 4% on the day, closing at US$34.15 (NZ$50), and continued to rise in after-hours trading following the announcement of AMD's results.