AMD Plunges Back in the Red, Posts Gloomy Outlook
January 25, 2012 12:42 PM
comment(s) - last by
AMD at least has the release of Trinity, Southern Islands to look forward to
Advanced Micro Devices, Inc.'s (
) new CEO Rory Read said AMD is working to be a company that "consistently delivers on its commitments."
It looks as though the company has a bit of work left to do.
its earnings for (calendar) Q4 2011 late Tuesday and the result was a clear miss. Versus much of the rest of 2011 [
], where it posted profits, Q4 saw a $177M USD net loss when the results were adjusted to the general acceptable accounting practices (GAAP), the U.S. accounting standard.
Revenue stayed constant from Q3 2011 at $1.69B USD. This is a fairly substantial miss from the analyst consensus earnings target of $1.71B USD [
Aside from a slightly depressed gross margin (down 1 percent), the net loss comes largely due to a set of charges (losses). AMD took a $209M USD impairment charge on its investment in the GlobalFoundries chip fab, a $24M USD payment to GlobalFoundries charge, and a $98M USD general restructuring charge. AMD
began laying off some employees
in Nov. 2011.
AMD warns that the situation will get worse, with weakening demand expected for H1 2012. It's predicting$1.56B USD in Q1 2012 revenue. Previously, analyst targets had hovered around $1.7B USD, but they've since been adjusted down to a slightly more optimistic $1.59B USD.
The chipmaker saw graphics revenue dip 10 percent, with mobile GPU sales down. This dip may be compensated in H1 2011 by the official availability of
the Radeon 7000 HD series
). In the good news department, AMD's "computing solutions" department surged 7 percent in sales, keeping revenue steady from Q3 2011. AMD says its server and chipset sales have improved.
Picture top to bottom:
, the Fusion APU
(middle), and the
are expected to launch in 2012 and give a boost to AMD's revenue
's on-die GPU is partially derived
). [Image is property of DailyTech/Jason Mick]
In total, AMD made a net income (annual profit) of $491M USD in 2011, up modestly from 2010, a critical turnaround year for the firm.
Looking ahead AMD's gloomy forecast is definitely cause for caution. However, substantial excitement is surrounding AMD's next-generation
ultrathin-geared "Fusion" accelerated processing units
AMD is looking to stay aggressive with pricing, allowing for sub-$500 ultrathin laptops. Assuming AMD can keep its volume of the new chips high, it could see strong sales based on this attractive price point. AMD is confident that its APUs will beat similar Intel Corp. (
in price, battery life, and graphics, though it concedes that
will likely have more computing power.
AMD shares were puzzling trading 2.6 percent higher, despite the earnings miss and despite the general market being down about a quarter of a percent.
FT [analyst predictions]
This article is over a month old, voting and posting comments is disabled
1/25/2012 7:24:29 PM
The public may not need that much in advancement, but that just puts amd in an even worse position. You can get most of the stuff you've listed without a decent APU at all. It pretty much exists for portable gaming.
Since the public only requires so much from its computers, AMD needs to get the enthusiasts, or the low power draw markets, otherwise the public is not going to care and will just get what's available in the shop, which is usually intel. It doesn't really have a competitive CPU except for integer crunching, and intel is much further along with reducing draw on their low powered chips. It needs llano for its cpu segment to survive.
"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer
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