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AMD trims its losses and Microsoft shores up its gains

Advanced Micro Devices, Inc. (AMD) announced its earnings report late yesterday, as did the world's largest operating system maker, Microsoft Corp. (MSFT).

I. Microsoft Gets Boost From Deferred Revenue

Both companies beat analyst estimates.

Despite slowing PC sales and criticisms about its design direction with Windows 8, Microsoft drew revenue of $20.5B USD in its fiscal third quarter -- up from $17.4B USD in 2012's fiscal Q3.  Windows revenue was essentially flat, but was up 23 percent with the inclusion of deferred Windows 8 upgrade income.

Microsoft made $6.06B USD in profit.  While the revenue was roughly in line with a Financial Times survey of 23 analysts, the profit was a bit of a surprise: the surveyed analysts only expected $5.7B USD in profit.

Steve Ballmer w Windows 8
Microsoft posted a bigger-than-expected profit on the back of Windows 8 upgrade revenue.
[Image Source: AFP]

Despite controversy over DRM, Microsoft’s Xbox 360 continues to be a strong revenue driver as part of The Entertainment and Devices Division.  Microsoft is looking ahead to Windows 8.1 (codenamed "Windows Blue") and Windows Phone 8.1, which will launch later this year.

II. AMD: Lower Losses, Big Console Design Wins

AMD saw revenue sag to $1.09B USD, down from $1.59B USD a year before.  But it further trimmed its operating loss to $146M USD, down from a whopping $473M USD in 2012.  That loss was significantly smaller than the $202M USD analysts expected it to post.

Rory Read, AMD president and new CEO comments, "Our first quarter results reflect our disciplined operational execution in a difficult market environment.  We have largely completed our restructuring and are now focused on delivering a powerful set of new products that will accelerate our business in 2013. We will continue to diversify our portfolio and attack high-growth markets like dense server, ultra low-power client, embedded and semi-custom solutions to create the foundation for sustainable financial returns."

AMD cut nearly 30 percent of its engineering staff in late 2012.  But it also hired on some engineers with mobile experience to boost its prospective entry into the tablet or smartphone space.  AMD has started shipping Richland CPU+GPU chips, which fall in AMD's A-Series branding.

Looking ahead in the longer term, AMD is plotting a switch to ARM Holdings Plc.'s (LON:ARM) proprietary CPU architecture.  In the meantime AMD looks to have strong upcoming sources of revenue thanks to design wins on the PS4 console from Sony Corp. (TYO:6758) which uses AMD GPUs and CPUs, and Microsoft's upcoming Xbox 720, which is expected to use an AMD CPU.   There's currently an AMD 550 MHz Radeon "Latte" GPU aboard Nintendo Comp., Ltd.'s (TYO:7974popular Wii U.

Sources: Microsoft, FT [analyst estimates; MSFT], AMD, FT [analyst estimates; AMD]

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RE: Microsoft's been doing it for years
By Pirks on 4/19/2013 6:01:30 PM , Rating: 0
yes, it's shit because it can't run x86 apps. all the other OEMs made pretty nice Atom tablets that can do everything that RT can do but they are also cheaper, run all windows x86 software, last longer on a battery and work faster too, however stupid emballmer made a useless tablet based on ARM that can do nothing, it is way worse than competing Atom tablets, and to add insult to injury it also costs more. I'd understand if emballmer was offering RT for like $200, it would be like hey people here we have shit tablet that is useless and can't do shit BUT it only costs $200! no, emballmer was way too stupid to do that. this is why I was surprised there were the whole ONE MILLION idiots who bought useless RT when they were selling better and cheaper Atom tablets right next to RT!

people are totally fucking braindead and emballmer also washed their dead brains with his stupid click click dancing ads, so idiots who bought RT would feel better or something, apparently RDF works the other way too :) anyway I too kinda enjoy my RT sometimes, it's not very bad, it's just I will always regret that I bought RT instead of an Atom based tablet, but now it's too late. I got myself core i5 tablet with win8 already and when bay trail win8 tablets are out RT will finally die, I'll probably get bay trail tablet too in addition to my current core i5 one (it's a surface pro btw :P)

By Mint on 4/20/2013 1:08:18 PM , Rating: 2
I'm convinced that RT is just a backup plan to make sure Intel didn't sandbag its next Atom effort.

Intel couldn't have been happy with how netbooks displaced a lot of entry level laptop sales with CPUs that give Intel far more profit per unit, and this is despite them gimping Atom and its chipset quite a bit in the early days. They made Atom just barely good enough so that along with the Intel brand, they stopped AMD or Via from claiming that market.

Clovertrail has had some supply problems, and tablets based on it should be as cheap a ARM tablets, but they aren't. MS decided to send a message.

"The Space Elevator will be built about 50 years after everyone stops laughing" -- Sir Arthur C. Clarke

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