AMD shows big profit but Intel nibbles margins

CHIP FIRM AMD showed a big jump in profits for its third quarter financial period, but its gross margins fell, while it also reported some manufacturing problems.

The firm turned in sales of $1.33 billion compared to $1.52 billion a year back, with net profits of $134.5 million compared to $76 million in the equivalent quarter last year.

The firm continued to sell more CPUs but made less money from those it produced.

In a conference call, CEO Hector Ruiz said that it had sold more of its notebook chips but unspecified problems with manufacturing slowed down its plans.

However, the Spansion spinoff somewhat muddies the waters because the third quarter last year showed a hit from losses its then flash memory unit made.

The gross margin for the period fell to 51.4 per cent, down from the previous financial second quarter reflecting pressure put on the firm by Intel, which slashed prices on its soon-to-be defunct Netburst 4 family. µ

	AMD (tick: AMD)		Intel (tick: INTC)
	Q3 2006	Q3 2005	Q3 2006	Q3 2005
Revenues	$1.3 bill	$1.2 bill	$8.7 bill	$9.96 bill
Net Profits	$134 mill	$128 mill	$1.3 bill	$2 bill
Gross margin	51.4%	55.4%	49.1%	59.7%