AMD Sees Profit for Second Straight Quarter in Q1

Chip maker Advanced Micro Devices reports it generated $257 million in profit and $1.57 billion in revenue in the first quarter, making it AMD's second consecutive quarter of profit after 12 losing quarters. CEO Dirk Meyer attributes the success to AMD's strong product line and execution.

Advanced Micro Devices saw a boost in server and PC revenue in the first quarter, and overall generated $257 million in profit on $1.57 billion in revenue.

The quarter was the second in a row in which the world's second-largest chip maker saw a profit after 12 consecutive quarters of losses.

CEO Dirk Meyer said the company's business was looking up in all areas, including servers, PCs and its growing ATI graphics portfolio.

AMD's product lineup overall is as strong as it's ever been, Meyer said. In the server space, where two weeks ago the company introduced its eight- to 12-core Opteron 6000 "Magny-Cours" chips and is ramping up to introduce its four- to six-core "Lisbon" processors this quarter, he said AMD has its most competitive lineup since mid-2006.

"Customer interest in our platforms is very promising," Meyer said.

In the graphics space, AMD has sold more than 6 million graphics units supporting Microsoft's DirectX 11 technology, and began selling its first notebooks with DirectX 11 graphics support.

Meyer also talked about the growing support for AMD's products, including Lenovo making its notebooks with AMD technology and Acer putting the Opteron 6000 processors in its servers.

AMD's graphics business grew 88 percent year over year and its Computing Solutions segment grew 23 percent. The largest PC makers-including Hewlett-Packard, Dell, Acer and Toshiba-all added systems running on AMD's Athlon II and Phenom II desktop chips and Turion mobile processors.

In addition, AMD officials said more than 25 new server platforms are being created based on the Magny-Cours Opteron technology.

AMD's financial numbers were released two days after rival Intel announced very strong first-quarter earnings, including a profit of $2.4 billion on $10.3 billion in revenues.

Officials with both chip makers talked about continued spending by consumers as the worldwide recession that hobbled the global economy in 2009 is beginning to ease. They also noted what seems to be interest from businesses in resuming spending on their IT infrastructure.

Looking forward, AMD officials declined to give a specific prediction for the second quarter's revenue, saying only it would come in seasonably down.

That was a much more cautious outlook than that of Intel officials, who predicted revenue of between $9.8 billion and $10.6 billion.

Meyer said AMD's Fusion strategy of building a processor with embedded graphics is being carried out on schedule. The company is scheduled to start ramping production in the second half of 2010, with desktops and notebooks powered by the technology coming out in early 2011.