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.
quote: AMD desperately needs to address their problems
quote: the full sentence in the beginning of that paragraph is a statement of how Motoman believes AMD should address their problems
quote: The "how" is not very obvious as there are numerous ways a company like AMD can tackle their problems.
quote: Thank you Captain Obvious!!!
quote: And you have the audacity to do so, with the full statement two inches above your 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).
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.
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?
quote: "they need better price/performance"... who wouldn't that help, in any performance product based industry?
quote: "if not an all-out superior product again" Ooohh that's it right there! Great analysis!
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.
quote: I don't entirely agree. The one with the best CPU has bragging rights.
quote: The one with the most money and the best marketing department has bragging rights.
quote: They need to captialize on low power NOW
quote: You think just because it's labeled "mobile" that it can't somehow be used in a desktop?
quote: AMD bled $1.19B USD in Q2 2008, up from $600M USD a year ago and $358M USD last quarter.