AMD reports $611 million loss

[zeroday]

Sunnyvale (CA) - Declining microprocessor sales as well as dropping average selling prices for its microprocessors have pushed AMD deeper into the red. The company reported a net loss of $611 million on revenues of $1.233 billion, which is more than 20% below the guidance the company expected at the end of Q4 2006.

The loss includes charges related to the ATI acquisition in the amount of $113 million, but is mainly a result of the increasing competition with Intel in the microprocessor market. The company said that its Q1 margins were 31%, down from 40% in Q4 2006 and down from 59% in Q1 2006. "The decrease from the prior quarter was largely due to significantly lower microprocessor unit shipments, lower microprocessor average selling prices (ASPs), and the inclusion of the former ATI operations, which generally have lower-margin products, for the entire quarter, AMD said.

AMD had revenues of $1.332 billion and a profit of $259 million in Q1 of 2006; in Q4 2006, the company reported revenues of $1.773 billion and an operating loss of $529 million.

"After more than three years of successfully executing our customer expansion strategy and significantly growing our unit and revenue base, our first quarter performance is disappointing and unacceptable," said Robert J. Rivet, AMD's chief financial officer, in a prepared statement. "We are aggressively addressing the issues that led to our significant revenue decline. We are aligning our business model, capital expenditures and cost structure with the goal of accelerating our return to profitability."

In a press release, AMD said that computing solutions group sales were $918 million, down 38% sequentially. "Year-over-year server and desktop processor unit shipments and revenues declined significantly, while mobile processor unit shipments and revenue increased significantly," the firm said.

Last week, AMD warned the financial community that the company would report significantly lower revenues. The company also announced that it plans to restructure its business model to increase operational efficiencies and lower its operating cost structure.

AMD's stock dropped about 2% in after hour trading late Thursday.

Source

[Lexcyn]

AMD needs to come out with something that can compete with the Core 2 Duo's and quad cores that Intel keeps pumping out. And also their ATI division needs to release the R600. :p

[PL_ Veteran]

^ +++++1

[Hurmoth]

I'm shocked their stock isn't down more than what it is (-2.25%) with an announcement like this. But I guess it is early in the trading day.

AMD really needs to get something out the door that can compete with Intel's Core Duo chips.

[NotChetHanks]

This is sad. I once considered myself an AMD fanboy because I would tell people to stay away from Intel. I would tell them that AMD is much better and not to get excited by "big numbers" from Intel. But AMD was slacking and I got a new C2D system and am very happy. Now I dont know if I will ever go back to AMD...

[Hurmoth]

This is sad. I once considered myself an AMD fanboy because I would tell people to stay away from Intel. I would tell them that AMD is much better and not to get excited by "big numbers" from Intel. But AMD was slacking and I got a new C2D system and am very happy. Now I dont know if I will ever go back to AMD...

I'm the same way. I was recommending everyone to AMD. I still consider myself an AMD fanboy, but mostly because I hate Intel with a passion (the way Mac fanboys hate Microsoft). Nevertheless, I have started recommended people Intel Core Duo chips. I, however, am going to continue to purchase AMD chips.

I am really curious to know how AMD ended up getting themselves in this position. AMD beat Intel with the x64 chip and the dual-core chips and then took a nap? I just don't get how they could let their guard down like that. And did they honestly think ATI could help their numbers? I mean, I was excited at first when the rumors of AMD acquiring ATI surfaced, but it hasn't actually helped them, in fact it has done more harm than good.

[Windam]

You would think they ran out of ideas..

What's the deal with Barcelona?

Fusion should be on the way if I'm not mistaken

[Hum]

How can this be ? I bought a new AMD cpu. :unsure:

[RootWind]

I am really curious to know how AMD ended up getting themselves in this position. AMD beat Intel with the x64 chip and the dual-core chips and then took a nap? I just don't get how they could let their guard down like that. And did they honestly think ATI could help their numbers? I mean, I was excited at first when the rumors of AMD acquiring ATI surfaced, but it hasn't actually helped them, in fact it has done more harm than good.

The problem with being a smaller company is that you have to do more with less. Once Intel stopped wasting its resources AMD was out of luck. Innovation is not magic, or easy.

And I don't see why they would have expected buying ATI was going to help their short-term numbers. I am sure they were aware it was going to be a loss in the short-term. It was a long-term investment.

[Danny1810]

This is one quarters results, the market will have made it's own estimates of their results, they only usually affect the share price by much when they differ hugely from market expectations. Let's see if they can pull around before we condemn them as beaten. Companies have lost a lot more and for a lot longer and still carried on, think of Ford and GM recently. AMDs loss is tiny compared to those ones.

We've all seen how quickly the balance of power can shift lately, in both the CPU and GFX market. AMD is currently #2 in both of these at the moment and is playing catch up, but who knows about 18 months down the line.

[fpd]

I'm the same way. I was recommending everyone to AMD. I still consider myself an AMD fanboy, but mostly because I hate Intel with a passion (the way Mac fanboys hate Microsoft). Nevertheless, I have started recommended people Intel Core Duo chips. I, however, am going to continue to purchase AMD chips.

I am really curious to know how AMD ended up getting themselves in this position. AMD beat Intel with the x64 chip and the dual-core chips and then took a nap? I just don't get how they could let their guard down like that. And did they honestly think ATI could help their numbers? I mean, I was excited at first when the rumors of AMD acquiring ATI surfaced, but it hasn't actually helped them, in fact it has done more harm than good.

AMD weren't napping. ?They just didn't have an answer to the Pentium M, which was based on the Pentium 3. ?Intel have far more money to spend on R&D so you would expect them to respond to the performance lead AMD had engineered.

[raskren]

I'm the same way. I was recommending everyone to AMD. I still consider myself an AMD fanboy, but mostly because I hate Intel with a passion (the way Mac fanboys hate Microsoft). Nevertheless, I have started recommended people Intel Core Duo chips. I, however, am going to continue to purchase AMD chips.

And this I just can't make sense of. Do you owe something to AMD?

I am really curious to know how AMD ended up getting themselves in this position. AMD beat Intel with the x64 chip and the dual-core chips and then took a nap? I just don't get how they could let their guard down like that.

They ran out of capital; capital required to renovate their fabs for 60 and 45nm production. Without smaller transistors, they're just going to run the Athlon into the ground like Intel did with Prescott. In hindsight, it seems that the Intel lawsuit was a last-ditch-effort to drum up some cash.

[Dark Ride]

What the **** do you people even care ? AMD can go declare bankruptcy. I could care less. Same goes for Intel.

It's not like your CPUs will become slower if AMD shares go down. They're already slow enough compared to C2Ds :p

Edited April 20, 2007 by Dark Ride

[PixilEyes]

What the **** do you people even care ? AMD can go can declare bankruptcy. I could care less. Same goes for Intel.

Then why the hell even post?

[Dark Ride]

Then why the hell even post?

Cause I was in the mood. Reason enough for me. ;)

[morca007]

Why care? Because without the healthy competition AMD provides, Intel would have no reason to grow.

[Dark Ride]

Why care? Because without the healthy competition AMD provides, Intel would have no reason to grow.

If AMD goes down, another company will step in. Don't fear.

[NotChetHanks]

If AMD goes down, another company will step in. Don't fear.

Silent Bob my ass!! :p

[TheRealDave]

If AMD goes down, another company will step in. Don't fear.

Care to name any?

[Pc_Madness]

Care to name any?

VIA!

*sn igger*

[raskren]

IBM is probably the only other chip manufacturer able to compete head to head with Intel and ship CPUs in volume. They produce really, really hot 90nm chips though.

[Dark Ride]

Silent Bob my ass!! :p

I prefer ######.

[rado354]

Seems like everyone forgot how AMD kicked Intel's ass for a period of 2-3 years with their AMD64 (Socket 754, 939) platform.

Now Intel has the best CPU - what's the big deal.

It's normal, every now and then they change the leadership.

I'm sure AMD will be back in the game soon.

[Krome]

Seems like everyone forgot how AMD kicked Intel's ass for a period of 2-3 years with their AMD64 (Socket 754, 939) platform.

Now Intel has the best CPU - what's the big deal.

It's normal, every now and then they change the leadership.

I'm sure AMD will be back in the game soon.

TBH with you, I have never thought AMD has better CPU or in your own term "kicked Intel's ass". Even with the test done side by side, the choice of my quality CPU will always goes to Intel. It was obvious back then as it is now. I still see that Intel is still leading the way.

The only relevant issue concerning AMD vs Intel is that AMD helps bring down the price of Intel so much that I now can afford latest Intel's CPU. That is remained to be thankful to.

As for CPU makers. I think I can name a few, besides AMD ofcourse. Like Pc_Madness state, VIA is one... if I am correct, in the near future nVIDIA and other companies (which is only on the tip of my tounge) will be producing CPU for the mainstream market. nVIDIA is starting to show interests in the CPU market.

[Long]

Everyone is forgetting AMD makes graphics chips as well.