AMD Q2 sales fall 16%

Sales warning realised

AMD warned us all to expect bad news this week, and last night it followed its warning with an announcement that Q2 sales were down 17 per cent on the previous quarter and 16 per cent down on the same period last year.

Revenue for the three months to 1 July totalled came in just shy of $1 billion - $985,264,000, to be precise, which led to earnings of $17.35 million (five cents a share).

This despite record unit sales of 7.7 million processors. That suggests some of the damage has come not from declining demand but from Intel's aggressive Pentium 4 price cuts and price reductions forced on AMD by the problems its customers are having shipping new PCs.

AMD's Q2 Flash memory business declined 23 per cent year-on-year (and 13 per cent on the previous quarter) thanks to the downturn in the cellphone market, surprise, surprise. No wonder Alcatel wanted out of its two-year Flash supply contract with the chip maker.

For the first six months of 2001, AMD reported total sales of $2.17 billion, down from H1 2000's $2.26 billion. Net income for the period totalled $142.19 million (43 cents a share), well down on the year-ago half's $396.49 million (117 cents per share). ®