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AMD at least has the release of Trinity, Southern Islands to look forward to

Advanced Micro Devices, Inc.'s (AMD) 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.

AMD aired its earnings for (calendar) Q4 2011 late Tuesday and the result was a clear miss.  Versus much of the rest of 2011 [1][2][3], 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 [source].

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 (codenamed Southern Islands).  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.

Trinity in the wild
Picture top to bottom: Brazos, the Fusion APU Trinity (middle), and the Southern Islands GPU TahitiTrinity and Tahiti are expected to launch in 2012 and give a boost to AMD's revenue
(Trinity's on-die GPU is partially derived Tahiti).  [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 (APUs).  

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. (INTCIvy Bridge system-on-a-chip designs in price, battery life, and graphics, though it concedes that Ivy Bridge 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.

Sources: AMD, FT [analyst predictions]

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Did anyone else here miss the boat?
By Mathos on 1/26/2012 1:38:20 AM , Rating: 2
Seems like I'm seeing several people here that seem to have missed the boat on the fact that AMD is no longer trying to compete with Intel. I believe they stated this a few months ago?

And as far as a lower profit, and Market share, I'm going to go with most likely poor yields at both GloFo and TSMC. As, spent wafers cost money, regardless of the number of working chips that come out of said wafer. And when the price margin is already pretty tight on said chips, well.. I'm just amazed they've been able to push Super strained SOI this far without needing to add HK/MG's yet, though it's becoming obvious they need to. My concern is that since glofo isn't part of AMD anymore, that they don't have access to that tech from IBM, or even Intel.

By melgross on 1/26/2012 1:53:05 AM , Rating: 2
Well, just recently AMD said that they didn't consider Intel to be a competitor.

Who are they kidding?

RE: Did anyone else here miss the boat?
By someguy123 on 1/26/2012 2:18:23 AM , Rating: 2
Saying they're not trying to compete is meaningless when intel is clearly trying to compete. the hd3k is still not up to par, but it's vastly improved compared to intel's old gma. Saying that they're moving to APU driven devices was basically a marketing stunt for the poor IPC of bulldozer.

RE: Did anyone else here miss the boat?
By silverblue on 1/27/2012 8:16:33 AM , Rating: 1
I keep wondering about the Intel compiler fiasco. Apparently, it's still crippling performance for non-Intel CPUs (yes, even now). Yet, if this compiler isn't that widespread, it won't completely explain poor AMD performance, though even if it was, AMD aren't looking very likely to bitch about it. So, in general, what "performance" we're currently seeing is likely the best we're going to get with Zambezi on Windows.

If the Intel compiler was everywhere and AMD were to bring out a superior CPU, it'd have to be bloody powerful to overcome such a handicap. All speculation, though.

By someguy123 on 1/27/2012 4:55:05 PM , Rating: 2
The issue with intel's compiler was that the SSE optimizations had to be validated against every competitor's cpu. If they just ran optimized code path with its compiler regardless of cpu you'd run into errors. It's doubtful that the software side of things are still seeing problems. Microsoft for example recently released a scheduler update to boost bulldozer performance, which doesn't necessarily improve intel processors. windows 8 also has an improved scheduler in the works.

By silverblue on 1/27/2012 8:16:54 AM , Rating: 2
AMD have been using HKMG since the launch of the first Llano APUs.

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