backtop


Print 43 comment(s) - last by obiwankenobi.. on Jul 25 at 1:10 PM

AMD once again has a disappointing quarter

While Intel merrily report rising Q2 profits and revenue, Advanced Micro Devices Inc. (AMD) sang a far different tune.  The smaller major player in the microprocessor industry reported earnings which disappointed even investors expecting less than a stellar performance

Preceding the earnings report was news from AMD that it would be taking a charge of more than $900M USD for losses based on the bill for its acquisition of ATI, its flash endeavors, and its struggling ATI TV and consumer electronics subunits.  This news set predictions of losses rather high. 

Whereas Intel reported profits beating expectations, AMD reported losses beating expectations.  AMD bled $1.19B USD in Q2 2008, up from $600M USD a year ago and $358M USD last quarter.  The adjusted losses, which take one time events into account, totaled 60 cents a share, worse than analyst predictions of 52 cents a share.

Depending on the metric you view, AMD revenue was either up or down.  AMD announced Q2 2008 revenue of $1.349B USD, up 3 percent from Q2 2007, but down 7 percent from Q1 2008 (curiously AMD's press release chooses to assert this negative comparison before the positive one).  Analysts on Wall Street had been hoping that it would show revenues of $1.45B USD, but yet again AMD left them with disappointment.

Gross margin, an important indicator of profitability, again, was up compared to last year, but down compared to Q1 2008.  The margin was 37 percent, excluding the impact from the sales of portions of its 200mm infrastructure, compared to 41 percent in Q1 2008 and 34 percent in Q2 2007.

As far as good news from AMD, about the only clearly good news it could offer were in terms of technology, which was also a slightly mixed bag.  AMD strongly pushed out Opteron server technology, which was viewed as a success.

In terms of technology, AMD's greatest Q2 2008 victory came from acquisition in terms of the 4000 series of graphics cards -- the 4850 and 4870 blew away similarly priced offerings from NVIDIA.  The impending release of the 4870 X2 in August/September, which early reports show to compare favorably with NVIDIA's similarly priced high-end GTX 280, could erode into one of NVIDIA’s last realm of dominance despite attempts to stay competitive via pricing.

In coming months, AMD needs to look to the success of ATI and try to expand it into the processor market.  It needs to forge ahead on its design of Atom-competitor low wattage processors and its next generations of multi-core processors.  It will also need to adjust to having a new CEO as CEO Hector Ruiz stepped down amid the bad news, after six years, with current COO Dirk Meyer stepping up to replace him.



Comments     Threshold


This article is over a month old, voting and posting comments is disabled

Back in the day...
By Motoman on 7/18/2008 11:00:58 AM , Rating: 2
...say, around the K6 era, people bought AMD chips either because of the attractive price point, or perhaps because of a better price/performance ratio.

Then the Athlon happened, and AMD enjoyed a good run of people buying their chips as a result of having excellent technology...technology at least equal to and usually better than Intel.

...and then Intel woke up, rubbed it's eyes, and fired back. Then AMD was back to trying to sell chips because of aggressive pricing, and maybe not even compelling price/perfomance ratios, and in a lot of ways riding the wave of fandom it had garned with Athlon. But that wave is a decreasing one...

AMD desperately needs to address their problems with a technology solution...they need to at a very minimum get back to a point where price/performance ratios favor them, if not an all-out superior product again (a la the Athlon series vs. P3 & P4).

They've apparently got the ATI division firing on all cylinders again...they need to get a similar success for the CPU division. And soon.




RE: Back in the day...
By mikefarinha on 7/18/2008 11:11:34 AM , Rating: 3
quote:
AMD desperately needs to address their problems


Thank you Captain Obvious!!!


RE: Back in the day...
By ImSpartacus on 7/18/2008 11:46:09 AM , Rating: 5
No kidding, that comment was like watching a Dr. Phil episode...

"Well, in order to not be fat you need to lose weight."


RE: Back in the day...
By Alpha4 on 7/18/2008 12:56:03 PM , Rating: 5
If I may chime in, the full sentence in the beginning of that paragraph is a statement of how Motoman believes AMD should address their problems, indicating that AMD should focus on performance-oriented developments as a solution.


RE: Back in the day...
By mikefarinha on 7/18/08, Rating: -1
RE: Back in the day...
By Alpha4 on 7/18/2008 1:53:36 PM , Rating: 2
I think you missed the emphasis placed on how. The "how" is not very obvious as there are numerous ways a company like AMD can tackle their problems. New Marketing, Downsizing or Product Portfolio Expansion, to name a few.


RE: Back in the day...
By mikefarinha on 7/18/08, Rating: 0
RE: Back in the day...
By deeznuts on 7/18/2008 1:27:56 PM , Rating: 3
quote:
Thank you Captain Obvious!!!

You sir, are the perfect example of someone taking a quote out of context. He offered his thoughts and analysis on what AMD has to do in order to address their problems, yet you just quote the first part.

And you have the audacity to do so, with the full statement two inches above your quote! You are very bright there sir.


RE: Back in the day...
By mikefarinha on 7/18/2008 1:49:42 PM , Rating: 1
quote:
And you have the audacity to do so, with the full statement two inches above your quote!

Yes, yes I did.

I agree with everything motoman said, but it is so painfully obvious.

Here is his full quote
quote:
AMD desperately needs to address their problems with a technology solution...they need to at a very minimum get back to a point where price/performance ratios favor them, if not an all-out superior product again (a la the Athlon series vs. P3 & P4).

"AMD desperately needs to address their problems with a technology solution..." what other kind of solution would AMD use to address their problem? Make more cowbell?

"they need better price/performance"... who wouldn't that help, in any performance product based industry?

"if not an all-out superior product again" Ooohh that's it right there! Great analysis!

And this one is for you deeznuts

quote:
He offered his thoughts and analysis on what AMD has to do in order to address their problems, yet you just quote the first part.


Thank you Captain Obvious!!!


RE: Back in the day...
By Motoman on 7/18/2008 3:03:16 PM , Rating: 2
Oh my...

quote:
"AMD desperately needs to address their problems with a technology solution..." what other kind of solution would AMD use to address their problem? Make more cowbell?


...there are lots of other solutions they could try. They could try to cut costs more. They could try to expand their product portfolio to a new market they're not in right now. They could do the inverse and sell off the parts of the company that are in the worst shape. And there are other options...my view is that they need a "technology" solution as the optimal target, i.e. they have to put their CPUs back on the map with Intel's offerings, rather than pursue any other course of action. It is probably the most obvious course of action, but it's probably not the easiest and most definitely is not the only course of action available to them.

quote:
"they need better price/performance"... who wouldn't that help, in any performance product based industry?


Naturally that would help anyone...however my point here is that in lieu of gaining the all-out performance crown, which of course would be awesome if they could do it, a more realistic goal is to try to balance the performance they can give with an attractive price point. Currently, at least on the desktop, AMD's price points are generally not attractive in relation to the performance they give. In an ideal world, that would be fixed by improving the performace of each part at each price point, but in terms at least of cash flow you might want to consider dropping your price points for each part to align them more favorably with Intel's chips.

quote:
"if not an all-out superior product again" Ooohh that's it right there! Great analysis!


...this being present in the original post to underline the notion that actually putting out the "best" CPU is likely secondary to achieving a price-performance ratio that's attractive. Which is not necessarily the conlcusion that everyone would jump to first...fanbois are wont to just scream for the new uber-processor that conquors all, without regard for the rest of the market.

...but thanks anyway for your insight.


RE: Back in the day...
By wordsworm on 7/19/2008 8:00:19 AM , Rating: 2
quote:
this being present in the original post to underline the notion that actually putting out the "best" CPU is likely secondary to achieving a price-performance ratio that's attractive.


I don't entirely agree. The one with the best CPU has bragging rights. Those bragging rights translate into more sales.

AMD's mistakes have come from the engineers' inability to compete directly with Intel's high end, and their desire to use cutthroat pricing when they simply didn't have the financial or manufacturing capacity to outgun a much larger competitor. This is the kind of stunt that a company like Intel would have managed well, but AMD just isn't in the position to make it work.

I think that AMD has turned an awful lot around in the last year. I have the feeling that the worst is over. Not because of Ruiz's walking away, but just because the ATI acquisition is now behind them, they *are* coming out with solid products now, even if they're not outdoing Intel, they're still significantly superior products compared to what they had a year ago.

Personally, I don't know why they put through those graphics cards at such a low price point. They could have easily priced them 25% higher and still wowed the market. Perhaps, though, what they really want is for the double sale: GPUs and chipsets.

I wouldn't be surprised to see AMD turn things around at the start of 2009. If I was a gambling man and my bank dealt in AMD stocks, I'd probably throw some cash at some stocks. Anyways, to restate the obvious - we need AMD to be a strong competitor.


RE: Back in the day...
By Calin on 7/21/2008 3:05:09 AM , Rating: 2
quote:
I don't entirely agree. The one with the best CPU has bragging rights.


The one with the most money and the best marketing department has bragging rights. Remember the P4 Prescott versus AMD Athlon64? AMD had to move to the "3000+, 3200+" nomenclature for its processors even if they had better performance.


RE: Back in the day...
By wordsworm on 7/22/2008 8:21:31 AM , Rating: 2
quote:
The one with the most money and the best marketing department has bragging rights.


I don't agree at all. The shift from an Intel dominated world to a two horse race was well on its way to being established. AMD was quickly gobbling up market share. Unfortunately, or fortunately, depending on how you look at it, Intel got back its wind at the same time as AMD lost theirs, and it's clearly leading the pack once again with AMD barely hanging on to its 4 socket server business. I am sure, confidant in fact, that AMD will see fair wind once more.

With bragging rights clearly back in Intel's possession, AMD is feeling this major pinch which we've been reading about for quite some time now.


RE: Back in the day...
By Mr Alpha on 7/19/08, Rating: 0
RE: Back in the day...
By Chaser on 7/18/08, Rating: 0
RE: Back in the day...
By rudolphna on 7/18/2008 9:19:39 PM , Rating: 1
would you please stfu? Thanks. There was no call for you to be a complete prick.


RE: Back in the day...
By buzznut on 7/20/2008 12:49:20 PM , Rating: 2
Captain obvious? Was that supposed to be clever? Its as bad as those "1980 called, they want their hair back." jokes.

BTW, the year 2000 called and they want their "Captain Obvious" reference back.


RE: Back in the day...
By Moishe on 7/18/2008 11:46:27 AM , Rating: 2
You've basically hit it on the head. Being the underdog puts AMD at a little disadvantage. The way to overcome that is by not failing to produce at least "decent" products and sell them for a good price. Having marketing that doesn't suck would help too.

Basically though, they have the same chance now that they had ten years ago.


RE: Back in the day...
By ZootyGray on 7/18/08, Rating: -1
RE: Back in the day...
By asdf23fvas324rf on 7/19/2008 2:03:18 AM , Rating: 2
its really interesting that you say that seeing as god and everyone knows that if the situation were reversed (aka, amd being the big shot and intel being the underdog) than amd would have done the EXACT same things that intel did. now, im not saying that makes intel justified in what they did/are doing, but the fact is amd would have done the same thing in a heartbeat, and ill bet you any amount of money that they probably at least tried to do it at one time or another as well.

and for all the horrible things intel has done lets not forget the things they have done that have allowed the industry to progress further. they could have held so many things for themselves, choosing to license them out and make huge profits (pci as one example), but instead choose to release them straight into public domain, something that im very doubtful amd would have done. so just remember that for all the twisted and tainted things intel has done they have done quite a bit that they didnt have to do at all.

and no, it necessarily wont. if amd takes too many losses then they may go under completely, or at least go through a period of completely restructuring the company, pushing back processors and endeavors to the point that intel will have so much of a market share and technological advantage that short of making something thats equivalent to the second coming of christ they will never catch up in any way.


RE: Back in the day...
By slickr on 7/18/2008 11:36:51 PM , Rating: 2
I totally agree.
AMD should have build some new type of processor until they had the lead, not after they've lost it.
The only new thing from AMD basically is the phenom procesors which are not that competitive anyways!


RE: Back in the day...
By obiwankenobi on 7/25/2008 1:10:07 PM , Rating: 2
well, with captain dirk on the helm, hopefully AMD will have favorable winds in their sails soon. the company have very good products in now that the quads are fixed its just the matter of right marketing to sell it. intel had sold crappy procs in the past very well its because their marketing strategy are executed very well.


I see doom and gloom in the short term
By tayhimself on 7/18/2008 2:32:12 PM , Rating: 2
Barring proper engineering followed by good sales & marketing I don't see how a 3% growth rate is going to help AMD. Intel is bigger and growing faster. Still stuck in some rough waters, is AMD.

They need to captialize on low power NOW (anyone like the pun of powerNOW!) Ahh Athlon XP i do not remember you fondly.




RE: I see doom and gloom in the short term
By Pirks on 7/18/2008 4:15:16 PM , Rating: 2
quote:
They need to captialize on low power NOW
Oh ignorance, you blossom on this forum. Haven't you ever heard of 2.5 GHz Athlon X2 chips that have TDP of 45 Watts? You gotta learn some hardware basics, man, before trumpeting your slogans here. Where are the 45 Watt Intel desktop C2Ds, huh? Think about it.


RE: I see doom and gloom in the short term
By michael2k on 7/18/2008 5:38:39 PM , Rating: 2
http://en.wikipedia.org/wiki/List_of_Intel_Core_2_...

You think just because it's labeled "mobile" that it can't somehow be used in a desktop?

2.6GHz Core 2 Duo, 35W TDP.
Higher performance and lower power than your Athlon X2.


RE: I see doom and gloom in the short term
By Pirks on 7/18/2008 7:41:20 PM , Rating: 2
Turion Ultra 2.1 GHz 32 Watt TDP spits on your C2D and rubs it in :P

3 Watts less of a TDP, not too bad huh?


RE: I see doom and gloom in the short term
By SiliconAddict on 7/19/2008 2:20:26 AM , Rating: 3
Yah never mind that the Turion is a Turd that turns most mobile systems into a egg fryer. But hey. Continue with the fanboism. No skin off my ass.


RE: I see doom and gloom in the short term
By rudolphna on 7/19/2008 1:33:53 PM , Rating: 2
OH hey easy. My lappy (Acer Extensa 5420) has a Turion64 X2 TL-58 in it, along with an AMD Integrated graphics card. It runs cool, the fan keeps it plenty cool, and is very quiet. Obviously your laptop was poorly designed. I own 2 laptops, a Toshiba X205 and the acer. The toshiba has a Intel C2D T5450, (1.66Ghz) with a 35watt TDP. it runs far hotter than the Acer does. The TDP indicates how much heat they put out. Therefor, they will put out about the same heat, its up to the manufacturer to decide how to cool it.


By Pirks on 7/21/2008 4:12:27 PM , Rating: 2
You think Intel fanatics can even remotely understand what you're talking about? I doubt that. Discussing CPU heat envelope with them is a waste of time. You tell them about AMD _desktop_ 45 Watt CPUs, and they retort with Intel _mobile_ chips. It's hard to believe people can be so dumb but hey, it's DT, man! So get used to this.


The problem with comparisons to the K6 days
By SigmundEXactos on 7/19/2008 12:30:24 AM , Rating: 2
During the K6 days, Intel processors were expensive (In the $400+ range, with $200+ for Celerons). The K6 and more so the K6-II, could be sold for a lower price and it was a decent processor (the Celerons when first released were crap).

Nowadays though, you can get a Core Duo processor for $120, and a dual core Intel chip for $68 shipped. The problem is that these processors are good enough! Certainly they're fine for word processing, web surfing, and light gaming. The place for AMD to compete on price is a lot more difficult than the pre-Athlon days.

This makes me quite afraid for the future of AMD. I'm actually glad now that they bought ATI (even though it was at a bad time), since they at least have another good leg to stand on (their flash business was always horrible).




RE: The problem with comparisons to the K6 days
By ICE1966 on 7/19/2008 1:59:27 AM , Rating: 3
The thing that really gets me about this whole AMD vs Intel is that people are stupid enough to believe that AMD does not make a good processor anymore. Thats complete horsecrap. Sure they may not overclock as well as Intel c2d's but that does not mean that they are no good. Anyone who thinks that is a complete moron. I have used Intel before and now I use AMD. There is nothing that you will run on an Intel machine that I cannot run on my AMD system, nothing. Sure you may finish a few seconds quicker than I do but hell 10-12 seconds doesn't mean shit to me.


By rudolphna on 7/19/2008 1:37:04 PM , Rating: 2
+6. Very true.


RE: The problem with comparisons to the K6 days
By Chocobollz on 7/20/08, Rating: 0
By ICE1966 on 7/20/2008 12:14:58 PM , Rating: 2
Why would I want to benchmark my system against 'other people's" anyway. So what, who cares if you get 175fps in, say COD4, and I only get 165fps. who really gives a damn, I don't. As for the overclocking, which I will guess might be your next response, of course, it may not, but just to clear the air on it. My guess is that you, and this is a guess, may have bought a lower clocked c2d and overclocked it to the actual speed you really wanted to buy. now you have to benchmark it so you can brag about how fast it is. Well, I did not have to do that, I actually could afford to buy the faster, stock clocked cpu without having to push mine to extreme levels. Again, most of this is purely a guess because I hope you have better things to than to benchmark your system against other people.


Why is it that...
By TOAOCyrus on 7/18/2008 5:44:24 PM , Rating: 2
Why is it that GPU makers always seem like they can come out with a comnpletely new arcetechure in 12-18 months that completely turns things around while CPU makers have to stick with the same basic artechure for like half a decade?




RE: Why is it that...
By rudolphna on 7/18/2008 9:25:45 PM , Rating: 2
becausing demand for more powerful graphics cards grows faster than demand for more powerful CPUs. CPU Architecures are multi-purpose, and will handle any kind of workload, and its much cheaper just to improve upon it, and improve upon it. Whereas Graphics dont always change architecture (remember, Geforce 6 and 7 were essentially teh same architecture, just more powerful) As games change, the types of loads change, (IE Shader power is more important than ever today) the architecture must change to adapt/


RE: Why is it that...
By Penti on 7/19/2008 1:51:25 AM , Rating: 2
First there is really no GPU makers just GPU-designers.

Secondly CPU designers and manufacturers come out with stuff like new vector unit instruction sets all the time. And as we got chipsets and sockets that needs to be compatible to the cpus, they can't change stuff like buses and memory controllers all the time.

But it's not the same thing like 3D graphics where you just need the drivers to do the new DX stuff, provided the hardware is capable of it. And really there is no (standard) GPU ISA as it's the drivers that talk to the graphic card/gpu. So they are just more free to make changes.

When writing programs that uses stuff like the SSE-unit for floating point calculations they need to know the instructions sets, they can't change, those who write programs that uses DX stuff don't need care about the instruction set of the GPU, they write the stuff for the D3D API. As the GPU design guys just need to write the drivers to do the DX stuff and talking to the DX library, they are not stuck to do things the same exact way with every gpu, for example the highly parallel designs gpus has is not possible in a X86 CPU. Without code that can take use of it of course.

But it's not exactly true that they do come with a completely new architecture every 18 months either. The GT200 architecture (GTX260/GTX280) is still derived from G80 that was released November 8, 2006. It will be awhile before we see any completely new GPUs.


By Amiga500 on 7/18/2008 12:18:56 PM , Rating: 2
AMD have nothing big scheduled between now and end Q3.

R700 will have minimal effect on the bottom line IMO.

IF they can get 45nm out in numbers before year end, then they should be able to improve CPU profit margins through improved manufacturing costs alone.

IF 45nm allows them to run chips slightly faster, then they can increase product prices too...

IF 45nm allows them to pack MCM onto dies, then they may be able to increase margins as well (but that only counts if they can increase beyond the cost of manufacturing the dies)

Unfortunately, I don't see anything much happening until 2009 at the earliest.




AMD Liquidity and Solvency
By EndPCNoise on 7/18/2008 2:16:53 PM , Rating: 2
Anyone here actually look at AMD's financial statements recently, and compute any liquidity and solvency ratios to see if AMD has the income and capital to be around in the future?




What does Hector have to say?
By Lifted on 7/18/2008 5:16:13 PM , Rating: 2
Hector no here. Hector go home. He go home now, maybe here tomorrow. Adios.




Your numbers misleading...
By CyborgTMT on 7/18/2008 10:55:23 PM , Rating: 2
quote:
AMD bled $1.19B USD in Q2 2008, up from $600M USD a year ago and $358M USD last quarter.


AMD didn't 'bled' over a billion. The $900M is a paperwork only hit, it has nothing to do with cash. Those millions went out the door years ago for the purchase of ATI. This is simply an account of devaluation of that purchase. For comparison this is like buying a new car, as soon as you drive it off the lot it's worth thousands less than you just paid for it, you didn't lose any money. But a corporation has to account for that loss of value.

http://www.anandtech.com/weblog/showpost.aspx?i=47...




Oh no!
By FaceMaster on 7/19/2008 1:46:04 PM , Rating: 2
OH NO!!!




"We basically took a look at this situation and said, this is bullshit." -- Newegg Chief Legal Officer Lee Cheng's take on patent troll Soverain

Related Articles













botimage
Copyright 2014 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki