Feeds

AMD parts with profits in Q2

Must improve

The essential guide to IT transformation

AMD suffered from the same desktop chip syndrome as rival Intel during its second quarter, as the company handed in another loss.

The chip maker's Q2 revenue increased double-digits to $1.4bn. But perfect year-over-year comparisons remain tough to come by, since only part of the acquired ATI's corresponding '06 quarter is included with AMD's financial results. It is clear, however, that AMD remains in the red, handing in a net loss of $600m during this year's second quarter. The loss includes $130m in charges tied to the ATI buy and tens of millions more in stock option and severance charges.

"While we made solid progress in the second quarter across a number of fronts, we must improve our financial results," said AMD CFO Bob Rivet.

AMD sold $1.1bn worth of chips during the quarter, which compares with $1.2bn in silicon moved last year. Rather than comparing year-over-year sales, AMD opted to focus on sequential gains, saying it made 20 per cent more in revenue and shipped 38 per cent more processors. It did, however, note that mobile processor shipments increased 82 per cent year-over-year, so we'll go ahead and assume that desktop and server shipments dropped year-over-year.

Graphics product revenue came in flat sequentially at $195m.

Like Intel, which reported results yesterday, AMD complained that average selling prices of desktop chips dropped during the quarter. The two chipmakers appear set on crushing each other's desktop margins, while they go after the growing mobile market and the more-lucrative server segment.

AMD's management seemed pretty optimistic overall, during a conference call with financial analysts to discuss the results. We're told that the company will continue to try and trim costs by selling off equipment and land and trimming sales and marketing efforts. AMD also sees a "pretty strong" second half of 2007 coming, due to healthy customer demand and the release of new server and graphics chips.

"The performance of Barcelona (AMD's upcoming quad-core chip) is extremely satisfactory," said EVP Henri Richard, who usually manages a bit more enthusiasm for new product than that.

Silicon watchers have been unmoved by the early Barcelona specs with the chip arriving later and slower than some had hoped.

"Barcelona, while being an absolutely great product, is complicated," said Dirk Meyer, AMD's COO. "It is taking more design work than we anticipated getting the final rev(ision) in place."

Not really what you want to hear.

AMD hopes to get its gross margins up and to reach profitability during the fourth quarter.

Shares of AMD rose close to five per cent in after-hours trading, at the time of this report, as investors seemed to react to claims of market share gains made by AMD executives and optimistic talk about improving gross margins during the latter part of 2007. By contrast, Intel shares dropped five per cent after its earnings report yesterday. ®

Boost IT visibility and business value

More from The Register

next story
So, Apple won't sell cheap kit? Prepare the iOS garden wall WRECKING BALL
It can throw the low cost race if it looks to the cloud
Apple's iWatch? They cannae do it ... they don't have the POWER
Analyst predicts fanbois will have to wait until next year
AMD unveils 'single purpose' graphics card for PC gamers and NO ONE else
Chip maker claims the Radeon R9 285 is 'best in its class'
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Apple to build WORLD'S BIGGEST iStore in Dubai
It's not the size of your shiny-shiny...
Just in case? Unverified 'supersize me' iPhone 6 pics in sneak leak peek
Is bigger necessarily better for the fruity firm's flagship phone?
Steve Jobs had BETTER BALLS than Atari, says Apple mouse designer
Xerox? Pff, not even in the same league as His Jobsiness
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
5 things you didn’t know about cloud backup
IT departments are embracing cloud backup, but there’s a lot you need to know before choosing a service provider. Learn all the critical things you need to know.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?