Advanced Micro Devices Inc. said its first-quarter profits and revenues exceeded those in the fourth quarter in an unexpected boost driven by an overshadowed product: flash memory.
Flash, considered a commodity product, boosted AMDs first-quarter net income to $45 million, on a sharp 73 percent jump in revenue compared with a year ago, to $1.24 billion.
AMD was even more profitable and recorded more revenue in the historically slower first quarter than during the fourth quarter of 2003, when sales generally peak. AMD recorded fourth-quarter 2003 income of $43 million on sales of $1.2 billion.
"The first quarter of 2004 was a high water mark for AMD," Hector Ruiz, the companys president and chief executive, said during a conference call with analysts Wednesday afternoon.
Led by Ruiz and Rob Rivet, the companys chief financial officer, AMD had undergone a program of aggressively cutting costs. Part of the companys strategy was restoring the flash business to profitability and selling its processors at higher prices, both goals the company achieved, Rivet said.
Although sales of AMD microprocessors were flat to slightly down, AMDs flash business did surprisingly well, significantly overshadowing AMDs own microprocessor business. AMDs Memory Group achieved record sales of $628 million in the first quarter of 2004 and achieved profitability in just the third quarter since AMD and Fujitsu combined their memory operations. AMD records the profit-and-loss statements from the combined FASL LLC operation on its own balance sheet.
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