Menu
AMD narrows net loss in second quarter

AMD narrows net loss in second quarter

AMD on the road to profitability, new products announced

AMD headquarters; Sunnyvale, California.

AMD headquarters; Sunnyvale, California.

Advanced Micro Devices narrowed its net loss during the second quarter of 2009 as it slowly inched its way toward profitability after consecutive quarterly losses, the company said Tuesday.

AMD reported a net loss of US$330 million, or $0.49 per share, during the quarter that ended on June 27. That compares to a net loss of $1.195 billion a year ago and a net loss of $416 million in the first quarter of 2009.

Financial analysts polled by Thomson Reuters expected a net loss of $0.47 per share.

In an effort to reach profitability, AMD in the first quarter spun off its manufacturing assets into a separate company called GlobalFoundries, which unloaded close to $1.1 billion in debt from AMD's books. GlobalFoundries is a joint venture with investment firm Advanced Technology Investment Company, which is owned by the Abu Dhabi government.

The company reported revenue for the second quarter of 2009 of $1.184 billion, which decreased 13 percent compared to the second quarter of 2008 and was flat compared to $1.177 billion during the first quarter of 2009. Revenue beat analyst expectations of $1.13 billion.

AMD successfully met its product plans during the first half of the year and hopes to release new products as it moves toward profitability, said CEO Dirk Meyer in a statement. He specifically mentioned new platform, microprocessor and graphics products that the company plans to release in the second half of the year.

Though the company's revenue exceeded expectations, underutilization of factories and dropping PC prices, led by laptops, affected the company's margins, Meyer said during a conference call. Pricing pressure on low-end graphics cards also reduced margins.

Margins were also affected by aging chips made using the 65-nanometer process, which dominated AMD's shipments, Meyer said. Although AMD no longer owns its manufacturing facilities, it is responsible for some of GlobalFoundries' manufacturing costs.

The company wants to clear off its remaining 65-nm inventory and quickly turn to the newer 45-nm manufacturing process, which produces faster and more power-efficient chips at a lower cost. Meyer said 45-nm chips will make up a larger percentage of shipments in the second half of this year, which could drive up margins by cutting manufacturing costs.

AMD hopes to reduce its exposure to GlobalFoundries' manufacturing costs over time as GlobalFoundries gains more customers and establishes its own identity. AMD is still the only customer for GlobalFoundries, which is set to announce its first non-AMD customer in the next 30 days.

One promising product for upcoming quarters is the six-core Istanbul chip, which was released on June 1. Istanbul chips are designed for cloud computing installations, which Meyer expects to be one of the bright spots in the struggling enterprise market.

Many lightweight laptops with AMD's low-power Athlon Neo chips are due in the third quarter. AMD also plans to launch the Tigris platform for mainstream laptops in the second half of the year.

Meyer said it was hard to predict whether Windows 7 would be a big driver of chip demand in the near term. It might provide an opportunity to sell more expensive systems with separate graphics cards, he said.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Events

Featured

Slideshows

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

This year’s Reseller News 30 Under 30 Tech Awards were held as an integral part of the first entirely virtual Emerging Leaders​ forum, an annual event dedicated to identifying, educating and showcasing the New Zealand technology market’s rising stars. The 30 Under 30 Tech Awards 2020 recognised the outstanding achievements and business excellence of 30 talented individuals​, across both young leaders and those just starting out. In this slideshow, Reseller News honours this year's winners and captures their thoughts about how their ideas of leadership have changed over time.​

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners
Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security

Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security

This exclusive Reseller News Exchange event in Auckland explored the challenges facing the partner community on the cloud security frontier, as well as market trends, customer priorities and how the channel can capitalise on the opportunities available. In association with Arrow, Bitdefender, Exclusive Networks, Fortinet and Palo Alto Networks. Photos by Gino Demeer.

Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security
Reseller News welcomes industry figures at 2020 Hall of Fame lunch

Reseller News welcomes industry figures at 2020 Hall of Fame lunch

Reseller News welcomed 2019 inductees - Leanne Buer, Ross Jenkins and Terry Dunn - to the fourth running of the Reseller News Hall of Fame lunch, held at the French Cafe in Auckland. The inductees discussed the changing face of the IT channel ecosystem in New Zealand and what it means to be a Reseller News Hall of Fame inductee. Photos by Gino Demeer.

Reseller News welcomes industry figures at 2020 Hall of Fame lunch
Show Comments