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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 psonice on 7/22/2009 11:51:23 AM , Rating: 2
I don't know if it's just 'better product'. Microsoft won a lot of wars without 'better product' and got spanked for it afterwards (although I'm not sure they care so much when the competition is no longer around...) and now intel are being fined €1bn for the same kind of anti-competitive behaviour.

Perhaps if AMD had had more of a chance a few years back, they'd have put a lot more money into R+D and had much more competitive products now?

That said, AMD hasn't made a profit for most of its life, and it seems to be doing OK. I don't get how that works (or why a non-profitable company can keep getting hold of more cash to keep running), but perhaps it'll just continue losing money and raising cash to compensate?


RE: Eeep
By amanojaku on 7/22/2009 12:39:37 PM , Rating: 2
quote:
I don't know if it's just 'better product'. Microsoft won a lot of wars without 'better product'
I agree. I buy AMD exclusively, because in MY opinion AMD makes a better product than Intel. My AMD CPUs are cheaper and use less power than comparative Intel parts, while providing all the performance I need. On the other hand, if I were an extreme user I would most likely be using Intel. "Better" is a matter of opinion based on your wants and needs. I said the same things about UNIX vs. Windows (I love AIX and Solaris,) RISC vs. CISC (Power6 is awesome, and I miss the Alpha,) and Token Ring vs. Ethernet (half duplex sucked.) Funny thing is, it's usually the easier and cheaper solution that wins out, no matter how crappy it turns out to be.

quote:
Perhaps if AMD had had more of a chance a few years back, they'd have put a lot more money into R+D and had much more competitive products now?


As time goes on, however, even the crappy solution matures and gets better. Windows continues to dominate UNIX. RISC is all but dead. Ethernet killed off token ring years ago. This is also the case with AMD. Remember how sh1tty the K5 was? Then the K6 came out and helped AMD gain a little respect? Then K7 (the Athlon) came out and we sh1t our pants; it was that good. AMD has done a remarkable job (TLB bug notwithstanding) improving and updating the Athlon despite its financial woes and Intel's anti-competitive acts. I don't see any sings of AMD at Intel's throat, however.

quote:
That said, AMD hasn't made a profit for most of its life, and it seems to be doing OK. I don't get how that works (or why a non-profitable company can keep getting hold of more cash to keep running), but perhaps it'll just continue losing money and raising cash to compensate?
AMD is a public company, so it gets public funding and bank loans. A CEO's job is to court business and funding (hence all the greasy charm) so cash obtained through sales is only part of the incoming flow. The ATI acquisition, while costly, is turning out to be a good move for them, too. They probably make more money off of GPUs than they do CPUs!


RE: Eeep
By TomZ on 7/22/2009 2:45:30 PM , Rating: 4
quote:
I agree. I buy AMD exclusively, because in MY opinion AMD makes a better product than Intel.
Maybe you prefer AMD processors for whatever reason, but that's not because they make a better product. Even a casual glance at benchmarks proves that.
quote:
AMD is a public company, so it gets public funding and bank loans. A CEO's job is to court business and funding (hence all the greasy charm) so cash obtained through sales is only part of the incoming flow.
That's also a crappy way of running a company - kind of a downward spiral. Getting loans and raising capital to meet short-term obligations or to fund growth are good, but borrowing money to fund a long series of quarterly losses is a bad thing.


RE: Eeep
By smackababy on 7/22/2009 3:27:57 PM , Rating: 3
AMD could try and switch from a public company to a nonprofit one. They have the numbers of years of operation in the red to show they have no profitability anymore.


RE: Eeep
By ipay on 7/22/2009 3:48:56 PM , Rating: 2
hahaha, burn!


RE: Eeep
By ICE1966 on 7/22/2009 3:28:13 PM , Rating: 2
quote:
Maybe you prefer AMD processors for whatever reason, but that's not because they make a better product. Even a casual glance at benchmarks proves that.


Its very easy to say that this company or that company makes a better product, but to say its because it is proven in benchmarks is a little narrow in thinking, IMHO. I use AMD pruducts simply because I like them. I have used Intel in the past and there is nothing wrong with thier processors. I have a current AMD box that runs everything I throw at it including audio and mep encoding duties. I could have spent more money and built an even faster machine, but I did not need it, just as most people do not need what they have. I use my AMD machine to play game on and it runs great. So what if someone with an i7 turns a few more frames with thier machine, who cares except someone who needs bragging rights because they feel insecure about themselves. you know the kind, they want to say my box can score this or that when it really does not matter. I have the financial means to build whatever I want to build, and I chose AMD. they make very good processors, just as Intel does. people need to get off this high horse and throw these synthetic benchmarks out the door. Its real time, real world performance that matters.


RE: Eeep
By TomZ on 7/22/2009 4:03:03 PM , Rating: 2
Nice rationalization there. It sounds like you have a strong case of Core i7 envy. :o)


RE: Eeep
By clairvoyant129 on 7/22/2009 8:22:07 PM , Rating: 3
"i7 pushes out few more frames"? The low end i7 totally demolishes any high end PIIs. They aren't even in the same league... even the much slower C2Qs are faster than PIIs clock for clock. You also made a comment saying AMD uses less power than comparable Intel CPUs for the performance it gives. At the same power envelope, Intel CPUs give better performance than AMD. Which sites were you looking at to reach those conclusions? AMDzone.com lol?

And talking about e-peen... just because people want better performance or have money to spend, its bragging? So everyone should be like you and buy underperforming CPUs?


RE: Eeep
By themaster08 on 7/22/2009 9:06:46 PM , Rating: 3
quote:
who cares except someone who needs bragging rights because they feel insecure about themselves

Seriously, is that the only reason you think that people buy high-end Intel processors?

AMD's original Phenom processors were a complete flop, and the best available came in at 2.6GHz with a TDP of 140w (which soon dropped to 125w in later models). On top of that, this still wasn't enough to beat even the lower end of the Intel Core 2 Quad's, namely the Q6600 (which has a TDP of 95w).

It was only up until the release of the Phenom II line of processors that choosing Intel was more or less a no-brainer in the mid-range segment of the market. Unless, of course, you're a fanboy.

I find that some people who purchase AMD processors always find a way to criticise those who purchase higher-end Intel processors regardless of their reasoning, as though they have to justify their purchase.

They throw the "real world performance" card at them, probably because it makes them feel better. But I fail to understand how you can do so without trying both sets of processors. It seems to be the only half-baked criticism of Intel processors nowadays.

Buying mid-range/high-end Intel processors isn't necessarily about "bragging rights", at least it's not to the vast majority. It's about getting the best for your money, and Intel seemed to fit the bill much more than AMD in the mid-range market up until very recently.

If people wish to buy high-end processors, then that's their right. Do not criticise people for their purchases.


RE: Eeep
By phazers on 7/22/2009 4:02:42 PM , Rating: 3
quote:
The ATI acquisition, while costly, is turning out to be a good move for them, too. They probably make more money off of GPUs than they do CPUs!


Only if you're counting negatively :D. If you look at AMD's quarterly report, graphics lost $12M. In fact, every quarter has been a loser except for one, where they made $1M profit. Considering the interest on the $5.4B ATI acquisition debt, they'd have to make a sales profit of around $100M per quarter just to break even, IIRC.


RE: Eeep
By themaster08 on 7/22/2009 8:37:09 PM , Rating: 2
quote:
My AMD CPUs are cheaper and use less power than comparative Intel parts

I think you need to stop comparing power consumption from Athlon's and Pentium 4's and begin to do some research on power consumption of Core 2 vs. Phenom/X2.

You'll see that Intel always comes out on top compared to their AMD equivalents when it comes to power consumption. Even AMD's supposed "energy efficient" models with low TDP's have a hard time besting Intel's processors for energy efficiency.


RE: Eeep
By hyvonen on 7/23/2009 4:51:46 AM , Rating: 2
Oh, and don't forget the total amount of energy (kWh etc.); Intel's CPUs complete the job faster, and switch to idle quicker, saving power.

Too many reviews are focused on power consumption at full load... It's better to run at double the power if you can finish the job three times faster.


RE: Eeep
By themaster08 on 7/23/2009 6:43:50 AM , Rating: 2
Exactly.

Also, too many people also focus on TDP, which hardly tells the whole story. Albeit, Intel counterparts almost always have lower TDP's (excluding AMD energy efficient models).

Furthermore, we get people like the OP who blatantly haven't done their research on power consumption since the P4/Athlon days, or have done no research and just read what AMD themselves have had to say.

After all, what better place to compare energy efficiency of AMD processors to Intel processors, than on AMD's website?


RE: Eeep
By Regs on 7/22/2009 4:26:20 PM , Rating: 2
Just because a monopoly is the industry does not mean they don't have to adhere to the laws of supply and demand. For MS to sell more OS software, the need to decrease the unit price for each. While doing so, they also need to keep the cost per unit down to maximize profit. This includes keeping fixed costs to a minimum (economics of scale), and while variable costs increase as the rate of production increases, they also can't produce more than needed because of the law of diminishing returns. The profit maximization sweet spot for a monopoly firm is when marginal cost = marginal revenue.


RE: Eeep
By TomZ on 7/22/2009 4:52:59 PM , Rating: 2
I think you're missing a key point. Companies are trying to maximize total profit. In other words, they really don't care at the end of the day about their total sales/volume - total profit is what matters.

And because of this, if Intel finds itself in a monopoly situation, then it will likely find that point of maximal total profit by increasing prices, which will as you correctly point out, cause a decrease in demand.

The net effect is that Intel makes a lot of money and we all pay more in the end. In other words, the monopoly gives Intel the ability to set prices to whatever it wants. This is the main reason to try to avoid having monopolies in the first place - because it breaks the free market.


"Nowadays you can buy a CPU cheaper than the CPU fan." -- Unnamed AMD executive

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