AMD Beats Analyst Estimates, Trims Losses
January 23, 2013 6:18 PM
comment(s) - last by
Server unit performs well and APUs remain a promising competitor, despite general losses
Advanced Micro Devices, Inc. (
) still is in a very uncertain position. Its GPUs are currently
getting outpriced and outcompeted
by NVIDIA Corp. (
). On the CPU side, it is shining in certain niches --
heavily threaded applications
server chips) or
lightweight, inexpensive mobile CPU+GPU system-on-a-chip designs
) -- but in many cases Intel Corp. (
) is the better buy.
Add to the mix that AMD is
restructuring its leadership
plotting a switch
to ARM Holdings Plc.'s (
) proprietary CPU architecture, and you have quite a combustible mixture.
But AMD surprised investors with a better than expected fiscal fourth quarter, triggering over a 10 percent jump in the company's stock in today's trading.
Overall analysts expected, after write-offs were considered, that the company would post a loss of $0.20 USD/share ($146M USD), according
to a survey
of 27 analysts by
The Financial Times
. AMD delivered a loss of a mere $0.14 USD/share ($102M USD). Revenue was $1.16B USD; more in line with analyst expectation of $1.15B USD, a figure that marks a 32 percent drop year-to-year, and 9 percent drop quarter-to-quarter.
For the year 2012 marked a return to losses for AMD, after two years of narrow profitability.
The jump in shares was less a reflection that AMD's performance was good and more of a reflection that it wasn't
as bad as was expected
. Overall AMD still has tough questions to answer. But it can take comfort in that its cost cutting appears to be cutting losses at a faster than expected rate.
AMD is currently
laying off 14 percent of its global workforce
in a plan that "will be substantially completed in Q1 2013". Other potentially good news for AMD includes that its report that it renegotiated its agreement with GLOBALFoundries, a move which could lower its operating costs.
Also in the good news column, AMD reports server revenue rose, thanks in part to fruits of the SeaMicro acquisition. AMD acquired the niche server maker
for $334M USD in March of last year
. SeaMicro specializes in dense, power-efficient custom server designs for markets like cloud computing. While small, the company is highly regarded in the enterprise sector.
For AMD, the good news is that cash bleed has slowed. Now the company must refocus itself with a new vision, as it looks to close the wound altogether and seek a path to profitability.
AMD will likely remain focused on APUs like Trinity [center].
[Image Source: Jason Mick/DailyTech]
Stay tuned as there's also other emerging storylines surrounding the company. There's the
pending allegations of intellectual property theft
, which may or may not implicate NVIDIA in receiving AMD GPU secrets. And late last year, rumors of a
potential sale of AMD
surfaced. While those rumors have mostly quieted, AMD's losses could make it a potential acquisition target if the right buyer were to emerge.
This article is over a month old, voting and posting comments is disabled
1/24/2013 4:38:13 AM
AMD's market cap places the company at 2 billion worth (the public shares of it anyway). With companies throwing billions of dollars around just for the sake of legal footing AMD's price almost certainly leaves them swimming dangerously close to shark infested waters.
RE: Inexpensive buy
1/24/2013 8:17:46 AM
Agreed. And for the money, you can't beat the performance you're getting. Had a buddy of mine order a quad-core APU last night for a new build. He doesn't need a lot of graphics power but what you get in that chip is damn good for the price. Will it stop on an i5 for encoding? No. But as a platform it's great.
"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA
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