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AMD easily exceeded Wall Street expectations for its first quarter earnings as company executives touted continued strong sales in server and mobile CPUs.

AMD reported earnings for the period ended March 26 of $184.5 million, or 38 cents a share, compared to a loss of $17.4 million, or 4 cents a share, in the same period last year. AMD's loss last year was largely blamed on trouble in Spansion, its flash memory business. The company spun off Spansion in December.

Analysts had expected earnings of 29 cents per share, according to Thomson/First Call.

Revenue in the first quarter was $1.33 billion, up from $780 million in the first quarter of 2005. The 2005 numbers exclude some $450 million in revenue from the Spansion flash business. With the Spansion number included first quarter 2005 revenue would have been $1.23 billion, slightly lower than the current quarter.

AMD executives said they expected second-quarter, a seasonally slower quarter, to be flat or slightly down from the first quarter but up about 65 percent from the prior year.

Some of the sales gains were a result of increased average selling prices (ASPs) in desktop and mobile processors, executives said. In particular, they said, Opteron server and the Turion 64 mobile processors saw strong demand.

While AMD has seen higher ASPs in desktop and notebook CPUs, it purposely cut its Opteron server prices to help increase market share.

Executive Vice President and Chief Sales and Marketing Officer Henri Richard denied the server processor changes were a reaction to competition with Intel, which has been working to gain back server share it lost last year.


"We took an offensive stance to increase our footprint in the marketplace," said Richard.

Intel has an aggressive roadmap in the second half and has said publicly its prices will be aggressive. Richard said AMD expects to see a a more "competitive situation" in the second half of the year.

While AMD has been beating analyst expectations, Intel has been struggling to meet them. Lower than expected desktop processor sales and unit prices led Intel to miss expectations in the fourth quarter. In March, Intel said first-quarter revenue would come in lower than expected -- between $8.7 billion and $9.1 billion, compared to the previous expectation of between $9.1 billion and $9.7 billion. Intel pegged the warning to weaker than expected demand and a slight market segment share loss.

Intel is slated to report its first quarter numbers April 19.

Source:CRN.

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AiM

AMD rocks again and again. Oh.. I wish if i could get a job their.

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