AMD's 1Q Profit Tops Views, But Outlook Muted
Fueled by rising demand for chips that enhance HD visuals and battery life, Advanced Micro Devices (NYSE:AMD) revealed late Thursday a stronger-than-expected jump in first-quarter profit, though its bleak outlook for the current quarter spooked investors.
The Sunnyvale, Calif.-based company posted net income of $510 million, or 68 cents a share, compared with $257 million, or 35 cents a share, in the same quarter last year.
Excluding one-time items, the company earned 8 cents a share, ahead of average analyst estimates polled by Thomson Reuters of 5 cents. Revenue for the chip maker was $1.61 billion, up 2% from $1.57 billion a year ago, matching the Street’s view.
“First quarter operating results were highlighted by strong demand for our first generation of AMD Fusion Accelerated Processing Units,” Thomas Seifert, the company’s chief executive, said in a statement. “APU unit shipments greatly exceeded our expectations, and we are excited to build on that momentum now that we are shipping our 'Llano' APU.”
Code named “Llano,” the company commenced shipments last quarter of AMD’s first Fusion APU for mainstream notebooks. The product combines discrete-class graphics capabilities, personal supercomputing performance and AMD AllDay power, the company said.
Several of the world’s top computer makers, including Toshiba, H-P (NYSE:HPQ) and Dell (NASDAQ:DELL) shipped newer notebooks last period based on AMD’s low-power APUs, which it said are capable of delivering high-definition visuals and extended battery life. Apple (NASDAQ:AAPL) during the period refreshed its MacBook Pro line-up with AMD’s new Radeon HD graphics chips.
Computing solutions climbed 3% year-over-year on stronger microprocessor unit sales, though sales of the microprocessor ASP slipped from the year-earlier period. AMD’s graphics segment was flat from the first-quarter of 2010.
Sending its shares slightly lower after hours, AMD said it anticipates revenue for the current quarter to be flat to slightly down, thought it did not give further details about the estimate.