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AMD profits, shipments up

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AMD has turned in a good Q3 with sales of $1.33bn and net income of $134m, or 27 cents a share. Processor shipments rose 18 per cent from Q2 and revenues climbed nine per cent from Q2 and, on a like-for-like basis, 32 per cent from Q3, 2005 (last year's figures included the lossmaking memory business, since spun off).

AMD says this reflects strong performance in all brands, but gross margin fell from 56.8 per cent in Q2 to 51.4 per cent in Q3. The company reports record mobile processor and Opteron server processor sales and higher average selling prices in both categories, so blame for the margin decline lies with to lower desktop processor ASPs.

With Intel now cleared of old inventory, there may now be a respite in the desktop CPU price war. But don't hold your breath.

AMD has not pencilled in any numbers for Q4 projections, but it expects the usual seasonal uplift and higher revenues than in Q3. On the manufacturing front, it expects its first revenue shipment of 65nm chips in Q4. And it expects its takeover of ATI, the Canadian graphics processor firm, to close next week. ®

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