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AMD posts $29m loss but predicts future profits due to PS4 and Xbox One sales

Expects deals with Sony and Microsoft to turn fortunes around
Fri Jul 19 2013, 13:15
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CHIP DESIGNER AMD reported a $29m loss for its second quarter, with sales falling by 17 percent to $1.16bn.

Following AMD's troubled 2012 the firm has been trying to turn around its fortunes in 2013 and announced two major deals with Microsoft and Sony. The firm's second quarter financials show that it narrowed its losses to $29m, compared to a $98m loss a year ago, as sales fell by 17 percent to $1.16bn.

Following Intel's 28 percent drop in profits, that AMD has managed to decrease costs and near profitability is impressive. However the firm is expecting better things in the third quarter with AMD CEO Rory Read forecasting a sharp growth in sales and a return to profitability.

Read said, "Our performance in the second quarter was driven by opportunities in our new high-growth and traditional PC businesses. Looking ahead, we will continue to deliver a strong value proposition to our established customers and also reach new customers as we diversify our business. We expect significant revenue growth and a return to profitability in the third quarter."

AMD's forecasted sales growth in the third quarter is not particularly surprising. The firm's chips will power both Microsoft's Xbox One and Sony's Playstation 4 (PS4) games consoles, both of which are expected to appear at the tail end of 2013, meaning that production will ramp up during the third quarter.

AMD's rivals will look at next quarter's earnings with great interest to see how much money the firm will be making out of its long-term game console contracts with Microsoft and Sony.

However more importantly for consumers, if AMD manages to get back into the black that should lead to greater competition, particularly in the high volume x86 processor and discrete GPU markets. µ

 

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