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Upgrade push could be the salvation of long struggling AMD

In business, just like in real life, companies can be a victim of expectations.   Fortunately for chipmaker Intel it handily beat the estimates of Wall Street's top researchers, reporting its best quarter ever.  On Tuesday night after the closing bell Intel reported a Q2 2010 revenue of $10.8B USD, handily topping the $10.25B USD predicted by analysts.

Chipmaker AMD, the David to Intel's Goliath, had some good news of its own on Thursday.  The company posted a net loss for Q2 2010 of only $43M USD, $110M USD less than the loss widely predicted by Wall Street.  AMD reported revenue of $1.65B USD, where analysts had predicted it to pull in only $1.54B USD.  It also posted a promising Non-GAAP earnings were $83M USD.

AMD has benefited from its success in the GPU segment, and, like Intel, by a strong upgrade cycle demand for CPUs.  AMD credits stronger demand for notebook CPUs and GPUs as a major source of its turnaround.  With its latest results, AMD inches closer to finally crawling out of the money pit it has long been languishing in.  In fact, if the current results are any indication, AMD may return to profitability within a quarter or two.  

Ultimately, AMD and Intel are being buoyed up by a strong upgrade push both in the desktop and notebook sector.  A major part of this push is thanks to Windows 7, Microsoft's latest consumer operating system that is earning unanimous praise from reviewers and customers alike.

While some worry about the upgrade craze dying down, it seems likely to continue strong for some time while so many customers still have Windows XP.  Additionally, businesses will likely slowly jump onboard the upgrade train as they look to transition to Windows 7.  If Microsoft can replicate Windows 7's success with Windows 8, the outlook for both Intel and AMD may continue to be just as rosy.

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By rwei on 7/16/2010 10:20:25 AM , Rating: -1
I have so far resisted what appears the common urge to Mick-bash...but holy cr@p...the number of errors you've made here boggles the mind.

First, the obvious point: does it not seem odd that you make a loss and a profit at the same time? OR, does it seem important to distinguish between revenues and net income? And - even if you had gotten both of those very important things right - maybe you should try to get the numbers within 2 orders of magnitude of their actual values? A billion is NOT the same thing as a million.

And heck, even if you were completely right on ALL of the above, meaning that they DID make $1.65mm, don't you think that's abnormally SMALL for a company of this size?

Poor structure and evident bias I can live with, but glaring errors and inconsistency within a single article? Come on!

I'd stop coming here, but unfortunately these posts appear on the AnandTech home page...

By Taft12 on 7/16/2010 10:38:18 AM , Rating: 2
I'm going to go a bit easier on Mick since he obviously works without a news editor's assistance, but I REALLY wish he would at least link to a non-DT article for a convenient way to look at the numbers ourselves.

By theArchMichael on 7/16/2010 11:14:19 AM , Rating: 3
And heck, even if you were completely right on ALL of the above, meaning that they DID make $1.65mm, don't you think that's abnormally SMALL for a company of this size?

Yeah you would think so, right? I remember a couple of years back maybe like 2004, I saw AMD CEO (bald guy, I think he's German) was on news really excited that they were only losing millions of dollars a year versus tens of millions. I think they posted a real profit for a few quarters... then after Core 2 Duo... Right back in the crapper.

Business is a weird business.

By sprockkets on 7/16/2010 12:08:22 PM , Rating: 3
You do know that you can have income and lose money right? People do get paychecks yet are still in debt.
Wrong. You can't have both net income and net loss, and that's what was in the article.

Stop calling us retarded, retard.

By OUits on 7/16/2010 12:12:34 PM , Rating: 2

bbomb is mixing up net income with revenue.

Maybe he doesn't know what net refers to?

By lewisc on 7/16/2010 6:02:14 PM , Rating: 2
You can have a positive net income (generally regarded as income net of operating costs) but still make a loss after tax and financing costs. In fact, it's pretty frequent, especially when the costs of finance are high.

I've not seen AMDs accounts so I'm not indicating whether the article was right or wrong, just pointing out that from an accounting perspective, the two are not mutually exclusive.

By OUits on 7/16/2010 8:09:28 PM , Rating: 2
No, you can't.

What you're referring to is Operating Income, or Earnings Before Interest and Taxes.

Net income takes into account both taxes and 'financing costs' aka interest expense.

By rwei on 7/16/2010 12:20:45 PM , Rating: 4
(1) As another poster stated, you can't have both net income and net loss. Gross income and net loss, sure.
(2) You seem to be mixing up a combination of:
- cash
- revenues
- income
- debt

If you actually want to have a discussion of financial topics, you have to be VERY careful about your language.

And before you call other people retards...consider taking an introductory accounting class.

By spread on 7/16/2010 12:31:57 PM , Rating: 2
Net income = Net Profit = Profit (usually used instead of Net Profit)
Income = Revenue

Lots of finance terms are interchangeable like that.

To the author: I would recommend you get an editor before submitting an article, or at least getting it proofread by someone who knows what they're talking about. It seems to me like every article you submit makes you look like an idiot.

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