AMD Reports Third Quarter Results.- 18 Percent Sequential Revenue Increase Driven by Record Microprocessor Unit Shipments and Increased Graphics Segment Revenue - SUNNYVALE, Calif. -- AMD (Advanced Micro Devices, Inc., Sunnyvale, CA, www.amd.com) A major manufacturer of semiconductor devices including x86-compatible CPUs, embedded processors, flash memories, programmable logic devices and networking chips. (NYSE NYSE See: New York Stock Exchange :AMD) today reported third quarter 2007 revenue of $1.632 billion, an 18 percent increase compared to the second quarter of 2007 and a 23 percent improvement compared to the third quarter of 20061. In the third quarter, AMD reported an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $226 million, and a net loss of $396 million, or $0.71 per share. Third quarter results include a negative impact of $120 million, or $0.22 per share, due to ATI (ATI Technologies Inc., Markham Ontario, http://ati.amd.com) A leading manufacturer of graphics chips and display adapters. Founded in 1985 by K. Y. Ho, Benny Lau and Lee Lau, ATI chips and boards are widely used by OEMs. acquisition-related, integration and severance charges and impairment of assets. In the second quarter of 2007, AMD reported revenue of $1.378 billion and an operating loss of $457 million. In the third quarter of 2006, AMD reported revenue of $1.328 billion and operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $121 million. "We are encouraged by the progress we made in our third quarter financial results. We delivered a strong revenue increase, gained 8 percentage points of gross margin and reduced our operating loss by more than half," said Robert J. Rivet, AMD's Chief Financial Officer. "We sold a record number of microprocessors through our distribution channel and began revenue shipments of Quad-core AMD Opteron[TM] processors in the quarter. "Graphics segment revenue increased 29 percent sequentially, as customers increasingly adopted AMD's new ATI Radeon HD[TM] 2000 series of graphics processors." Third quarter charges of $120 million consisted of ATI acquisition-related, integration and severance charges of $78 million and asset impairments of $42 million associated with our ownership of Spansion, Inc. common stock. [TABLE OMITTED] Third quarter 2007 gross margin was 41 percent, compared to 33 percent in the second quarter of 2007 and 51 percent in the third quarter of 2006. The increase from the prior quarter was due to increased microprocessor unit shipments, manufacturing efficiencies, improved inventory management, and a richer product mix in the Computing Solutions and Graphics segments. Computing Solutions Third quarter Computing Solutions segment revenue was $1.283 billion, a 17 percent sequential increase. The increase was driven primarily by a 19 percent increase in microprocessor revenue. Microprocessor unit shipments increased 16 percent sequentially. Mobile processor unit shipment growth remained strong, increasing 41 percent sequentially and 68 percent year-over-year. Graphics Graphics segment revenue of $252 million grew 29 percent from the second quarter of 2007. The success of the new ATI Radeon HD 2000 series of graphics processors led to increased unit shipments and revenue. Consumer Electronics Third quarter Consumer Electronics segment revenue was $97 million, compared with $85 million in the second quarter of 2007 driven by improved handheld unit sales unit sales Sales measured in terms of physical units rather than dollars. Unit sales data are often used by financial analysts when evaluating the health of a company. and increased game console See video game console. royalties. Current Outlook AMD's outlook statements are based on current expectations. The following statements are forward looking, and actual results could differ materially depending on market conditions and the factors set forth under "Cautionary Statement" below. In the seasonally up fourth quarter, AMD expects revenue to increase in line with seasonality. Additional Highlights * AMD introduced the world's most advanced x86 processor, the Quad-Core AMD Opteron processor. * HP, Lenovo, NEC (NEC Corporation, Tokyo, www.nec.com, www.necus.com) An electronics conglomerate known in the U.S. for its monitors. In Japan, it had the lion's share of the PC market until the late 1990s (see PC 98). NEC was founded in Tokyo in 1899 as Nippon Electric Company, Ltd. , Packard Bell See Packard Bell NEC. , Samsung and Toshiba introduced new AMD platforms featuring the combination of AMD processors and the AMD690 chipset A group of chips designed to work as a unit to perform a function. For example, a modem chipset contains all the primary circuits for transmitting and receiving. A PC chipset provides the electronic interfaces between all subsystems (see PC chipset for illustration). . * Dell, HP, Lenovo, and Toshiba, among others, began offering desktop and notebook systems featuring the ATI Radeon HD 2000 series of graphics processors. * AMD was named Best-in-Class Supplier for Standard Silicon in Sun Microsystems' 2007 Supplier Awards program, was also awarded CMP CMP (cytidine monophosphate): see cytosine. (1) (CMP Media LLC, Manhasset, NY, www.cmp.com) Part of United Business Media, CMP is a leading integrated media company that offers a wide variety of publications and services in the information Channel's VAR Business 2007 Tech Innovator of the Year award for the server category, and AMD's quad-core processor technology won 2007 Best of VMworld Awards for the Green Computing Green computing is the study and practice of using computing resources efficiently. Typically, technological systems or computing products that incorporate green computing principles take into account the so-called triple bottom line of economic viability, social responsibility, category. * AMD licensed graphics technology to Freescale Semiconductor Freescale Semiconductor, Inc. is an American semiconductor manufacturer. It was created by the divestiture of the Semiconductor Products Sector of Motorola in 2004. Freescale focuses their integrated circuit products on the automotive, embedded and communications markets. and Qualcomm. * AMD completed a $1.5 billion convertible debt offering and used the net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). , together with available cash, to repay in full the $1.7 billion outstanding balance of the term loan used to acquire ATI. AMD Teleconference AMD will hold a conference call for the financial community at 2:00 p.m. PT (5:00 p.m. ET) today to discuss third quarter financial results. AMD will provide a real-time audio broadcast of the teleconference on the Investor Relations Investor relations The process by which the corporation communicates with its investors. page of its web site at www.amd.com. The webcast will be available for 10 days after the conference call. About AMD Advanced Micro Devices (NYSE:AMD) is a leading global provider of innovative processing solutions in the computing, graphics and consumer electronics markets. AMD is dedicated to driving open innovation, choice and industry growth by delivering superior customer-centric solutions that empower consumers and businesses worldwide. For more information, visit www.amd.com. Cautionary Statement This release contains a forward-looking statement forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. concerning revenue for the fourth quarter of 2007 which is made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward-looking statements are commonly identified by words such as "would," "may," "expects," "believes," "plans," "intends," "projects," and other terms with similar meaning. Investors are cautioned that the forward-looking statements in this release are based on current beliefs, assumptions and expectations, speak only as of the date of this release and involve risks and uncertainties that could cause actual results to differ materially from current expectations. Risks include the possibility that Intel Corporation's pricing, marketing and rebating programs, product bundling Product bundling is a marketing strategy that involves offering several products for sale as one combined product. This strategy is very common in the software business (for example: bundle a word processor, a spreadsheet, and a database into a single office suite), and in the fast , standard setting, new product introductions or other activities targeting the company's business will prevent attainment of the company's current plans; the company will require additional funding and may not be able to raise funds on favorable terms or at all; the company's cost reduction efforts will not be effective; customers stop buying the company's products or materially reduce their operations or demand for its products; the company will be unable to develop, launch and ramp new products and technologies in the volumes and mix required by the market and at mature yields on a timely basis; the company's competitors, customers and suppliers may take actions that will negate ne·gate tr.v. ne·gat·ed, ne·gat·ing, ne·gates 1. To make ineffective or invalid; nullify. 2. To rule out; deny. See Synonyms at deny. 3. the anticipated benefits of the company's acquisition of ATI; demand for computers and consumer electronics products and, in turn, demand for the company's products will be lower than currently expected; global business and economic conditions will worsen, resulting in lower than currently expected revenue in the fourth quarter of 2007 and beyond; there will be unexpected variations in market growth and demand for the company's products and technologies in light of the product mix that it may have available at any particular time or a decline in demand; the company will be unable to transition to advanced manufacturing process technologies in a timely and effective way, consistent with planned capital expenditures; the company will be unable to maintain the level of investment in research and development and capacity that is required to remain competitive; and the company will be unable to obtain sufficient manufacturing capacity or components to meet demand for its products or will under-utilize its microprocessor manufacturing facilities. Investors are urged to review in detail the risks and uncertainties in the company's Securities and Exchange Commission filings, including but not limited to the Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended June 30, 2007. AMD, the AMD Arrow logo, AMD Opteron, and combinations thereof, and ATI, the ATI logo, and Radeon are trademarks of Advanced Micro Devices, Inc. Other names are for informational purposes only and used to identify companies and products and may be trademarks of their respective owners. 1 As a result of the acquisition of ATI, 2006 financial results only include the results of the former ATI operations from October 25 through December 31, 2006. Therefore, financial results for the third quarter 2007 do not correlate directly to those for the third quarter 2006. 2 In this press release, AMD has provided non-GAAP financial measures for operating income (loss) to reflect its financial results without acquisition-related, integration and severance charges. Management believes this non-GAAP presentation makes it easier for investors to compare current and historical period operating results. 3 Includes stock-based compensation expense. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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