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Hardware AMD Reports $1.72 Billion USD Q4 Net Loss
Brandon Hill (Blog) - January 17, 2008 7:20 PM
Print E-mail del.icio.us 71 comment(s) - last by cheetah2k.. on Jan 21 at 8:49 PM

AMD "Barcelona" die shot.
AMD reports its Q4 earnings

Yesterday, DailyTech reported on Intel's Q4 2007 earnings. The chip giant generated revenue of $10.1 billion USD, operating income of $2.2 billion USD and net income of $1.9 billion USD.

Despite Intel's performance for the quarter -- which outpaced Q4 2006 by a wide margin -- investors still drove the stock price for the company down 12 percent.

It's now AMD's turn to show its books and the results don't look very promising. The Sunnyvale, California-based company reported Q4 2007 revenue of $1.770 billion USD, a net loss of $1.722 billion USD and an operating loss of $1.678 billion USD.

For all of 2007, AMD recorded revenue of $6.012 billion USD and a net loss of $3.379 billion USD. AMD also reported that ATI, which it purchased in 2006 for $5.4 billion USD, is now worth 30 percent less.

"We were close to break-even operationally for the quarter, reducing our fourth quarter non-GAAP operating loss to $9 million. We improved gross margin by three points sequentially, driven by increased shipments of new products, higher average selling prices and cost containment actions," said Robert J. Rivet, AMD CFO Robert Rivet. "We shipped a record number of microprocessor units in the quarter, including nearly four hundred thousand quad-core processors."

As is the case with most tech companies, AMD expects earnings to take a dip during Q1 2008 -- the first quarter is traditionally a slow period for tech manufacturers.

In November 2007, AMD received a cash infusion from Mubadala Development Company, a United Arab Emirates (UAE) government-funded investment firm. Mubadala took an 8.1 percent stake in AMD valued at $622 million USD.

At the time, AMD Chairman and CEO Hector Ruiz was delighted in the investment stating, "This investment strengthens AMD’s ability to deliver customer-centric innovation and choice to the marketplace, creating greater value for all of our shareholders."

AMD will need all the help it can get to push forward its quad-core Phenom and Opteron processors. AMD has plans to ramp up 45nm chip production during the first half of 2008 while 32nm parts are scheduled to arrive in 2009.

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AMD Reports Net Loss
By Fnoob on 1/17/2008 7:30:32 PM , Rating: 5
They are quite good at that.




RE: AMD Reports Net Loss
By Bigjee on 1/17/2008 7:40:42 PM , Rating: 2
it was quite hot to touch.


RE: AMD Reports Net Loss
By Kilobyte on 1/17/2008 7:46:57 PM , Rating: 3
AMD lately has reported net losses, but mostly due to the acquisition of ATI. Once that debt is paid off, AMD will start posting at the least only millions of dollars lost, if not break even and or profit.
What people don't realize is that AMD is actually better off financially than it was 5+ years ago. In addition, it's kind of hard to compete to a company with a revenue that's over 5x greater than yours.
Eventually, the ATI acquisition will begin to pay off, but that's a few years from now.


RE: AMD Reports Net Loss
By phaxmohdem on 1/17/2008 8:02:37 PM , Rating: 2
Does anybody know when AMD will pay off their ATI credit card?


RE: AMD Reports Net Loss
By TITAN1080 on 1/18/2008 9:11:18 AM , Rating: 1
Now you know as well as I do that nobody pays off their credit cards.


RE: AMD Reports Net Loss
By napalmjack on 1/18/2008 10:52:36 AM , Rating: 5
Me and AMD: we both make too many technology purchases.


RE: AMD Reports Net Loss
By TSS on 1/17/2008 8:21:51 PM , Rating: 2
the problem beeing they admitted themselves that ati is 30% worth less now then they paid for it. meaning it'll take alot longer then anticipated to earn back the investment.

also, i think AMD's completly lost it trying to keep up with the intel tick-tock model. you said it yourself, intel has 5x more money to spend, at the very least. i'd wish they'd go back into their underdog position for another year or 2, consolidate profits and then see how far technology has improved and how much cheaper it's gotten. new architectures/process nodes aren't as cheap as they where a few decades ago.


RE: AMD Reports Net Loss
By Haltech on 1/17/2008 11:24:06 PM , Rating: 2
talk to their investors, the stock price 5 years ago was about 5 dollars. Now its like 6. Just check yahoo finance with AMD ticker symbol

http://finance.yahoo.com/q/bc?s=AMD&t=5y&l=on&z=m&...


RE: AMD Reports Net Loss
By defter on 1/18/2008 3:28:29 AM , Rating: 3
How on the earth AMD can pay off their $5.5B debt quickly? One needs to make profits to pay off the debt, one can't pay off debt while making only lossess...

quote:
What people don't realize is that AMD is actually better off financially than it was 5+ years ago.


5+ years ago AMD didn't have $5.5B debt, nor they made huge losses.


RE: AMD Reports Net Loss
By Regs on 1/18/2008 10:53:20 AM , Rating: 2
or 3x as much capital.


RE: AMD Reports Net Loss
By BruceLeet on 1/18/2008 3:32:52 AM , Rating: 1
Please understand that acquisitions dont bloom over night and it may take a few years for two companies of this size to come to positive fruition. I am most certainly not a fanboy of Intel over AMD, Nvidia over AMD, I just like the products for their performance/value but in all honesty I see AMD coming through with something, because they are innovators, Intel fanboys will rate me down but AMD has always been the innovator, people who know everything in the CPU market will agree.


RE: AMD Reports Net Loss
By Oregonian2 on 1/18/2008 2:23:57 PM , Rating: 2
As a design engineer, I'll say that AMD has traditionally been an innovator, but they've never really been able to follow through and make a difference with it. On the other hand Intel has not only "innovated", they've revolutionized the electronics industry multiple times by their innovation (although not in the recent decade or so).
The down thing about ATI in my mind is that my experience with their stuff was very bad. HW was okay but the associated SW was awful, so I've been using nVidia ever since for that reason.


RE: AMD Reports Net Loss
By clnee55 on 1/20/2008 8:28:33 PM , Rating: 2
They only have couple years with the athlon when they were real innovators. That day is over, now they sukc. If not, why can't they beat the core 2 duo. There is nobody in this world who can claim to know everything in the CPU market. So there is nobody who can agree with you.

quote:
Please understand that acquisitions dont bloom over night and it may take a few years for two companies of this size to come to positive fruition. I am most certainly not a fanboy of Intel over AMD, Nvidia over AMD, I just like the products for their performance/value but in all honesty I see AMD coming through with something, because they are innovators, Intel fanboys will rate me down but AMD has always been the innovator, people who know everything in the CPU market will agree.


RE: AMD Reports Net Loss
By Strunf on 1/18/2008 4:19:57 AM , Rating: 5
When we know our friend Hector Ruiz has a fatter paycheck than Paul Otellini one could wonder if AMD is really 10x+ smaller than Intel, actually in 2007 Hector was paid 4x more than Otellini.


RE: AMD Reports Net Loss
By PlasmaBomb on 1/18/2008 8:11:22 AM , Rating: 3
Ouch...


RE: AMD Reports Net Loss
By deeznuts on 1/18/2008 12:57:43 PM , Rating: 2
quote:
What people don't realize is that AMD is actually better off financially than it was 5+ years ago.
Care to back that statement up with some financial reports and/or numbers? I'm too lazy at work right now to dig that up, however I do remember that 5 years ago there wasn't talk about them being taken over by a private equity firm as there was last year.
AMD is hurting right now financially, I'm not sure how you can say otherwise.

However, their numbers while horrid are improving. Their stock is up. Curious isn't it?


RE: AMD Reports Net Loss
By eye smite on 1/17/2008 8:00:56 PM , Rating: 5
AMD is doing a fine job of pushing forward and marketing their products. They're a much larger company now than they were in the days of the athlon xp and growth is painful. They're more competition to intel than they were yrs ago, intel knows that and hence have put their considerable resources to get back on top and stay there, not just in cpu's but all markets that AMD is in. But for the doubters and nay sayers, here's a link on how the opteron dual core with original ddr still scales and outperforms the current xeons, to say nothing of how the xeon is blown away in scaling by the quad opterons.

http://connexitor.com/blog/pivot/entry.php?id=191


RE: AMD Reports Net Loss
By eye smite on 1/17/2008 9:53:21 PM , Rating: 2
Incidentally, I was just browsing best buy's site and they have a computer clearance section now. I counted 3 amd systems on clearance, but there were 9 intel systems on clearance. Without arguing statistics, reviews or anything else, seeing that on best buy's site kind of draws it's own picture.


RE: AMD Reports Net Loss
By jskirwin on 1/17/2008 10:17:24 PM , Rating: 3
quote:
seeing that on best buy's site kind of draws it's own picture.


Yep: market share.
3/12=25% which is roughly their market share of 27% reported by TheInq in Oct'06.


RE: AMD Reports Net Loss
By cochy on 1/17/2008 10:25:54 PM , Rating: 2
That there are more Intel machines in the market? What's your point?


RE: AMD Reports Net Loss
By eye smite on 1/17/2008 10:39:40 PM , Rating: 2
Not if you look at the number of machines for sale at best buy and circuit city. It's pretty equal on desktops between the 2 and circuit city actually has more amd desktops for sale than intel. Amd isn't hurting on sales of oem machines and intel isn't the performance chanp you all think they are. Read the scaling tests done in that link I posted. It's all perception issue, amd is still beating current core2 xeons in scalability with older opteronX2's using original ddr. You like numbers so much, go read it in black and white.