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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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RE: AMD's biggest problem is GloFo and TSMC
By ilt24 on 1/26/2012 2:56:57 PM , Rating: 1
Yeah, that is why they got sued in japan, EU and settled with AMD in the US....

For activities that happened years ago....and even while that was happening AMD was able to gain market share when they had the better product. More recently times have been tough for AMD because they have fallen behind both in their cpu core and in the manufacturing process they get to use. if you think they make up for it with their GPU fine, but for now the market doesn't agree.

RE: AMD's biggest problem is GloFo and TSMC
By liem107 on 1/26/2012 4:14:43 PM , Rating: 4
Maybe it also means that if they were not pushed down by unfair competition, they would have had more market shares and more revenues.... which also means they would have had more budget for R&D and therefore would have been able deliver new achitectures quicker thanks to larger engineering ressources.... etccc(how late were Fusion and bulldozer??).
If you use a knife during a UFC fight, it doesn't matter if the referee tells you drop it ..... once you have already critically injured your opponent.

RE: AMD's biggest problem is GloFo and TSMC
By someguy123 on 1/26/2012 6:35:05 PM , Rating: 1
I think people see their suits without looking at what they were actually sued for. Intel was/is sued for giving bulk rebates on their chips to OEMs, if they were willing to dedicate to intel. In a regularly competitive atmosphere this would be seen as normal incentive (become our dealer and get things wholesale), but obviously intel had substantially higher marketshare, which caused antitrust issues. They deserve the fine, but it's not as malicious as people make it sound when they claim intel bought out people to stop buying AMD products.

RE: AMD's biggest problem is GloFo and TSMC
By HrilL on 1/26/2012 7:46:48 PM , Rating: 3
From what I've read some Dell execs got payoffs as well from Intel. Maybe in in cash but other items... Intel had the worse processors from 1997-2006 the K6-2 through the Athlon 64 X2 and AMD was hardly able to gain any market share. Let’s get some facts out of the way. AMD was the first to break 1ghz, 2ghz, the first to have true dual core CPUs, and 64Bit support. Intel had to play catch up to AMD for pretty much every milestone. Had the market not been controlled by them illegally AMD would be a lot better off now days and would have a lot larger chunk of market share today.

They also would have been profitable and wouldn't have had to sell off their foundry and get bailed out by the Arabs...

By Reclaimer77 on 1/26/2012 8:06:09 PM , Rating: 2
Had the market not been controlled by them illegally AMD would be a lot better off now days and would have a lot larger chunk of market share today.

That's a lie. You're leaving out a major factor. AMD could barely produce enough chips to meet the demand they had. If they somehow got more market share, they wouldn't be able to sell more chips anyway.

You're all grossly overstating the effect of Intel's practices on AMD. Claiming AMD would be a giant today if not for whatever is a fantasy.

By someguy123 on 1/26/2012 8:49:00 PM , Rating: 1
none of that was ever substantiated. the only thing that was proven was that dell took the rebates and did not purchase AMD chips.

Also the things you've listed weren't really all that ground breaking. The initial batch of p4s for example were at higher frequencies, but much slower due to netburst. frequency of chips doesn't really matter if the IPC was as low as netburst chips. Also during that period intel actually had better performing chips thanks to northwood bringing the clocks up. I don't know why people keep assuming that those chips weren't comparable simply because of willamette. As for the dual cpu and 64bit support, amd's single package designs were lower performing, and at the time 64bit for consumer products was pretty arbitrary with the way x64 adoption was going. Not that I don't support switching to 64, but getting it out the door wasn't really heavy incentive compared to windows implementing full x64 builds with vista/w7.

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