AMD reports another loss
AMD ANNOUNCED its second quarter results Tuesday and, to nobody's surprise, it lost money again.
The second largest maker of x86 chips failed to match its much larger rival Intel's more upbeat results in the quarter, despite reporting along with its recently spun-off division Global Foundries for the time being.
The combined companies posted a loss of $330 million, or 49 cents per share, on revenues of $1.18 billion.
Although sales were off 13 per cent from the same period last year, the companies' quarterly loss fell by 75 per cent from $1.2 billion, or $1.97 per share, in the same period last year.
In after hours trading, AMD's shares dropped 48 cents or almost 12 per cent to $3.60.
The company blamed its poor showing on disappointing gross margins, which fell from 35 per cent last quarter to 27 per cent of revenue this quarter, exclusive of Global Foundries.
AMD said that selling off some older chip inventories during the quarter contributed to the lower margins.
The company claimed to have made strides in its product execution, however, and said its margins should begin to recover as it sells newer chips this quarter.
AMD's CEO Dirk Meyer told press and analysts, "While we increased cash, exceeded our revenue plan and reduced operating expenses in the second quarter, gross margin was disappointing."
AMD is still a company in transition though, with AMD Red, formerly ATI, and AMD Green having merged in the last year, and the manufacturing operation Global Foundries having recently ridden off into the Abu Dhabi sunset.
One bright spot in AMD's report was that its graphics business has seen some improvements, with AMD continuing to chip away at Nvidia's market share. This good news for littler chipper is that this should continue if the firm can deliver its DX11 Evergreen product family in time for the holiday season.
So, while AMD reported another losing quarter, things could be looking up for it next quarter, with a slew of new products on the way. It's widely expected that the upcoming Tigress and Congo platforms will improve the company's fortunes in the notebook space while Istanbul should give it continued headway in the server market, at least until Intel's Westmere bursts on the scene. µ
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They really did nothing with appropriate efforts. Punters without IT aware that have averages joe brain virtually did not know about AMD. It will become worse if they did not have viable products to beat Intel.
How are AMD still around - all I ever hear about is them reporting loss after loss, there must be some massive debt pile hidden away somewhere!
I hope microsoft helps AMD to fund AMD TV advertising. So, when DirectX 11 and windows 7 come up, microsoft can courages people to adopt new GPU for their windows. I think this is a mutual partnership between AMD and Microsoft, and Microsoft should not worry gor nvidia envious.
AMD's revenues have been fairly consistent for many years, pretty much hovering above the $1B mark. Since they're probably selling more chips nowadays with the availability of Phenom II, their costs must still be quite high. I don't blame them for not matching Intel's fab process timeline because AMD is already one of the most advanced when it comes to manufacturing, but the large die of Phenom II combined with low margins for ATI products and other misc. overhead is obviously keeping them down. It's easy to say they need Bulldozer and faster transition to smaller feature sizes but in their present condition it's simply very difficult.
More people have to support AMD and not be swayed by Intel's price cutting. Then again, that's competition. Blame it on the guys who sat through 2003 to 2007 building the Phenom. It all boils down to why they didn't come up with something much better at a much earlier date to compete against Core 2.
It's always the next quarter, the next product, the next CEO with AMD. Intel will be pumping out 32 nanometer this year... it's not going to be next quarter or the next product for AMD... it may be the next CEO though.
Graphics are only relevant when consumer spending and redundancies are corrected.
They 'blame' the selling of old inventory for gross margins, yet fail to mention that blowing this stuff out (which they had written off for a loss in q4) was the only reason they were close to flat on revenue as this accounted for just under $100mil of sales. It also helped significantly on the loss side as well (86mil impact).
....but AMD didn't mention that. (Wall St noticed - based on the sale price)
AMD has recently often used these one time gimmicks to make comparisons look better than they are - and I think that gig is up. Remmber when they threw a technology licensing fee into operating income one time time and used that to prop up gross margins?
Sun rises in the East, sets in West.
Im sure they will recover from making huge losses and turn to profit again. On the graphics side they are just doing an awsome job. they are eating up market share from nvidia as we speak, especialy in the notebook market acording to fudzilla they own 53% of the discrete market share which is mostly to blame to nvidias dieing and overheating chips but still the radeon offers great value.PHII is doing very good too. Just wait until global foundries is starting to run like TSMC AMD will get its die shrinks much faster and much more affordable. The profit dous not have to come from one side anymore and the operating costs are heavily reduced without fabs. They could however improve there name with something origional which people dont forget such as intel did with its jingle. The dragon platform concept is a very good move for the gaming tier. the stars for the CPU's are good too. But they need to get more share from the system builders. And epecialy on the notebook market they will need something much faster and energy efficient to keep up with intel. With almost more notebooks being sold as desktops they will have to work harder on that specific market.