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AMD Profit Beats Estimates

MANHASSET, N.Y. — Answering skeptics who expected a weak quarter, microprocessor supplier AMD Inc. posted sales of $1.26 billion and net income of $11 million, or 3 cents per share, for the second quarter ended June 26.In the year-ago quarter, AMD (Sunnyvale, Calif.) reported sales of $1.262 billion and net income of $32 million or 9 cents per share. In the first quarter of 2005, AMD reported sales of $1.227 billion and a net loss of $17 million, or 4 cents per share.
Analysts polled by Thomson First Call expected AMD to post a 6 cent per share loss.
"Our microprocessor business delivered another record quarter driven by increased demand for AMD server and mobile processors from our largest global OEM customers," said Robert J. Rivet, AMD's chief financial officer, in a statement. "Once again we continued to gain momentum with microprocessor sales growth increasing 38 percent compared to the second quarter of 2004. The solid overall demand was enhanced by our newer processor offerings.AMD reported gross margin of 39 percent, up from 34 percent in the first quarter, due largely due to record Computation Products Group (CPG) sales and gross margins.The company's troubled Memory Products Group saw sales of $462 million, down 31 percent from a year ago but up 3 percent from $447 million in the first quarter.AMD expects near-term microprocessor sales growth to exceed normal seasonal patterns, but is not providing guidance for its flash memory business because of Spansion's SEC Form S-1 filing.Hector Ruiz, president, chairman, and chief executive of AMD, said during a conference call with analysts the spinoff was proceeding as planned but did not elaborate.
AMD also said during the call it saw strong sales in its key geographic regions, including China and North America.