AMD alllllmost promises profitability by year end
Parsing the fine distinction between 'expectations' and 'goals'
AMD, slapped around by what CEO Rory Read and other corporate honchos like to refer to as "the challenging macro environment," looks to regain profitability in the second half of this year.
On a conference call with analysts and reporters after announcing its weak financial results for its fourth quarter of 2012, AMD CFO Devinder Kumar expressed confidence about the company's future. "We expect our restructuring actions and our corporate reset to position us to return to profitability and free cash-flow generation in the second half of 2013," he said.
Read echoed Kumar's verbiage – almost. A wee bit less definitively, he said that his team has the "goal of returning AMD to profitability and positive free cash flow in the second half of the year."
There's a subtle but distinct difference between expectations and goals – perhaps Kumar didn't get the memo about tempering his promises.
Although Read was a bit less definite than Kumar, he nonetheless painted an optimistic picture of his company's future. "We are introducing strong new APU and graphics offerings in the first half of 2013 that will accelerate our business," he said, saying that said acceleration will be what moves AMD toward the goal line.
That accelerated business will be coupled with a corporate "reset" that focuses AMD more on embedded systems and "dense servers", and on using its graphics IP to enable richer computing experiences on clients connected to – what else? – the cloud.
Read sees the AMD's graphics IP to be a "fundamental enabler" of the future cloud-enabled future. "That's the world we're chasing," he said. "We're not going after the past. Standalone data and applications on a singular device protected by a couple of proprietary control points – that era is ending."
The standalone clients of the past will be replaced by "almost a tsunami of new devices" equipped with AMD's graphics IP fed by the cloud, Read says. "They're efficient. They're low-power. They're across embedded devices. This is the opportunity in front of us: to really get after it where we can see graphics taking the business moving forward."
Seeing as how Read was speaking with financial folks who greatly affect his company's ongoing position, he was understandably both upbeat and future-focused. "The '13 roadmap looks strong," he assured the moneymen and moneywomen on the call. "It's across the board in terms of the execution. The schedules and the launches are tracking right to the schedules that we've laid out. We're working on '14 and '15 and '16."
And speaking of the future, Read also holds out hope for increased impact from Microsoft's latest operating system. "We do think Win8 is a very important event in the industry," he said, "and I think that impact or effect will build over the course of the year. We expect the second half to be stronger than the first half."
There's that second half of 2013 again. Even though Read is optimistic about AMD's second half of this year, he didn't promise that profits during that period would lift the entire year into profitability. "If I look at the overall year," he said, he sees it being "weaker in the first half, stronger in the second half, probably a net flat to slightly down." ®
During his review of the high points of AMD's fourth quarter, Read did drop one optimistic data point that surprised at least one Reg reporter – namely this one: "Nearly one in every three notebooks sold in US retail in the fourth quarter were powered by AMD," he said.
I hope they do. A stronge AMD keeps intel on its toes which is great for us no matter which brand you choose.
The problem at AMD ain't Intel, its AMD
The problem as written up by a former engineer is that the CEO after Ruiz, can't remember his name ATM, basically did a slash and burn on the company so he could get a quick rise out of the stock and cash out. The guys that made Bobcat? FIRED. The guys that made Athlon64? FIRED.
Pretty much all of the really great chip designers they had were given the boot in favor of computer controlled layouts which is why the bulldozer line is such a power piggie, computers simply don't understand anything about optimizing or most used paths so you end up with a chip that's 15% larger, slower, and more power hungry which when you are already behind is NOT the way to go. But of course firing that many people that got decent paychecks did give a short term bounce to the stock. Here is the link although I don't know if links are allowed here or not, this is my first time trying to post a link here so if I mess it up my apologies.
AMD is not dead, yet
For the past 40 years fools have been writing AMD's obituary, but AMD ain't dead yet - by a long shot, unfortunately for Intel.
I would not be surprised at all if it takes AMD a few more years to get their ship righted and stable considering the never ending economic depression that exists in the U.S., Europe and Asia, the primary PC and PC toy markets of the world.
AMD does actually have good products now and better products coming for PCs as well as portables, which is the booming niche right now. Micro servers is another area where AMD/Sea Micro have a number of exciting new products coming to market so Read may be accurate with his sales and profits projections, though it is still impossible to accurately read the market as Microsucks, Intel, Apple and many more who thought they were immune to the world wide economic disaster are learning real quickly.