Advanced Micro Devices Inc., the worlds second largest manufacturer of PC chips, on Thursday predicted that despite selling a record number of processors this quarter, revenues will remain relatively flat from the previous quarter.
Speaking at the companys annual fall analysts conference, AMD Chairman Jerry Sanders also warned that the sales could dip again during the first quarter of next year.
For the fourth quarter, Sanders said he expects overall revenue growth, based on percentages, to range from flat to the single digits. However, his outlook for the first quarter was more dour.
"Seasonal patterns in the PC industry lead us to believe that AMD PC processor revenues in the first quarter of 2002 could retreat somewhat from the current quarter," Sanders said in a statement issued Thursday.
Prior to the announcement, Wall Street analysts had been projecting that AMDs revenue would rise from about $768 million during the fourth quarter, to about $801 million in the first quarter 2002, according to a survey conducted by Thompson Financial/First Call.
Such a dip could further damage the bottom line at Sunnyvale, Calif.-based AMD, which last month reported it lost $186.9 million. At the time, Sanders blamed an ongoing price war with Intel Corp. for pummeling processor profits.
Despite an expected slow start to the year, Sanders said he was optimistic that the increasing sales and cost-cutting efforts would put the company back in the black next year.
"While we expect only very modest overall growth in the semiconductor industry next year, we believe that our new product offerings and low manufacturing costs will result in a profitable year overall for AMD in 2002," he said.
AMD is most widely known as the manufacturer of the Athlon XP and Duron processors. The company also is the second largest manufacturer of flash memory chips, which are commonly found in cell phones and handheld digital devices. However, once robust growth in flash chips collapsed this year, dragging down AMDs earnings.
"The outlook for flash memory going into 2002 remains uncertain, and pricing pressures on flash memory products are expected to remain in-tense," Sanders said. "We currently expect that these conditions will delay our return to profitability until the second quarter of 2002."