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AMD thinks things will turn around in the second half of 2009

AMD has posted its financial information for Q2 2009 and has reported yet another loss. The silver lining to the quarterly loss cloud is that the financials showed some improvement over the previous quarter. AMD also remains optimistic about Q3 and the rest of 2009.

AMD will be releasing new platforms before the end of the year that the chipmaker hopes will help turn its fortunes around. The company will be releasing its new Opteron processor servers, a market that AMD is still very competitive in, and will releases new notebook platforms.

According to EWeek, CEO Dirk Meyer notes that AMD worked on controlling costs in the first half of 2009 and that the cost controlling methods are expected to pay dividends in the second half of the year. Perhaps the largest of those cost-controlling methods was the spinoff of AMD's foundry operations into an independent company.

Meyer said during a call with financial analysts, "With a strong flow of new products and a leaner cost structure, coupled with assumption of modest seasonal growth, we are positioned for a stronger financial performance in the second half of this year."

Among the new platforms for notebooks that AMD intends to let loose onto the market in Q3 2009 are the Tigris platform for mainstream notebooks and an unnamed platform that is aimed at thin and light notebooks.

AMD reported a loss of $330 million for Q2 2009 amounting to $0.49 per share with revenue for the quarter of $1.18 billion. Analysts on Wall Street had predicted a loss for AMD of $0.47 per share with revenue of $1.13 billion. Despite the loss for the quarter, the numbers AMD posted looked better compared to a year ago.

Analyst John Spooner told eWeek, "The chip maker, like its rival Intel, showed sequential improvement in revenue," Spooner wrote. "Unit shipments fared reasonably well, with some improvement in the server space. Thus there are signs that point to AMD's business improving and the company marching toward its goal of becoming profitable (at least on a quarterly operating basis) in the second half of the year."

AMD rival Intel did well for the quarter until the massive EU fine was deducted making for $398 million loss.



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RE: Eeep
By TomZ on 7/22/2009 11:45:03 AM , Rating: 4
I think you're missing the point. Because AMD has inferior products, they are forced to sell them at lower price points in order to still sell them at all. This pricing eliminates the possibility of AMD earning a profit because of their relatively high cost structure.

So what you describe is fine from a short-term individual consumer perspective, but it is very bad for AMD, because it is only a matter of time before they "crack." They can't keep posting quarterly losses - it will eventually catch up with them. And when it does, that means bankruptcy for AMD. And maybe that forces them to exit the CPU market, which leaves it all for Intel - very bad for everyone (but Intel).


RE: Eeep
By Targon on 7/22/2009 11:43:14 PM , Rating: 2
The problem here is that while AMD may not be competing against the highest end of the Intel product line, the Phenom 2 line is decent for the money.

Basically, if you compare Porsche to Ford, Ford looks really bad, but Ford sells in high volumes, so it balances out a bit. AMD is a platform company, they not only produce CPUs, but also makes GPUs which put Intel to shame. Now, I have to ask, if AMD makes inferior products, why do you think they are selling well in the low to mid range these days?

You also need to look at what has been going on in the overall marketplace. Have you noticed that the economy is in a tailspin? Now, if AMD can hold steady, or even gain a bit compared to last year with how bad the economy is, and how many people are out of work, that is a good sign overall.

Now, take a look back at what AMD has done over the past ten years. Athlon came along, and beat out the Pentium 3 to reach the 1GHz mark first. In fact, the Athlon was so much better than the Pentium 3 that Intel was forced to drop the Pentium 3 and switch to the Netburst design with the Pentium 4.

So, Intel was able to scale the Pentium 4 up, and suddenly, AMD comes out with an on-die memory controller, and the K8 beats out the Pentium 4 for YEARS before Intel came back with the Core line of processors.

It should be noted that most of the claims of unfair business practices stem from these two periods. When AMD had the better product, Intel resorted to unfair business practices which are the subject of the ongoing legal battles between AMD and Intel.

So, Intel has had the lead for a while yet, but then AMD released the Phenom 2 line. Now, Intel is still out in front, but price/performance on the Phenom 2 line is competitive with what Intel has(I have not checked the results of the Intel price cuts yet, but up until at least a few days ago, a Phenom 2 955 was a good buy for the money, and the platform as a whole is competitive when it comes to price).

Now, it should be noted that AMD has been using things like a point to point bus and an integrated memory controller to help performance from a total system platform point of view. Yes, Intel has more resources to throw at any problem, but why is it that Intel has been following the system architecture changes that AMD has come up with, rather than releasing anything really new themselves(except new CPU designs)?

AMD really could return to profitability quickly once the economy starts to turn around. Most small businesses would rather use $350 workstations than more expensive workstations where they can, and do you REALLY see a lot of $350 workstations that are Intel based that are not complete garbage?


RE: Eeep
By hyvonen on 7/23/2009 4:45:18 AM , Rating: 2
Let me point out again that it's not price/performance that matters, but cost/performance. As long as AMD keeps making chips that perform as well as Intel's counterpart, but are bigger AND are built on a lower-yielding process, they can't expect to make enough profits to compete with Intel. And the situation is going to get even worse for AMD when 32nm Clarkdale chips come out.

Consumers only see the price/performance of AMD chips being "competitive" with Intel's, but the real story is in the profit margins.


"Well, we didn't have anyone in line that got shot waiting for our system." -- Nintendo of America Vice President Perrin Kaplan

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