AMD Posts $611 Million Net Loss in Q1
April 19, 2007 9:13 AM
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Q1 2007 performance is "disappointing and unacceptable" says AMD's chief financial officer
Ten days ago, AMD announced that it was planning to restructure its business due to a significant drop in quarterly revenue. At the time, the company was projecting its Q1 revenue to come in at $1.225 billion USD.
The official numbers are in and AMD has reported Q1 revenue of $1.233 billion USD and an net loss of $611 million USD. The numbers include a charge of $113 million USD due to the acquisition of ATI and $28 million USD for employee stock-based compensation expenses. AMD had revenue of $1.773 billion USD in Q4 2006.
The ongoing price war between AMD and Intel is partially to blame for the reduced earnings. Intel has been
aggressively cutting prices on its current processors
and AMD has been
quick to respond
. AMD as a result has witnessed lower average selling prices (ASPs) in addition to lower unit sales.
"After more than three years of successfully executing our customer expansion strategy and significantly growing our unit and revenue base, our first quarter performance is disappointing and unacceptable," said AMD CFO Robert J. Rivet. "We are aggressively addressing the issues that led to our significant revenue decline. We are aligning our business model, capital expenditures and cost structure with the goal of accelerating our return to profitability. Lastly, our customer relationships remain solid, reflecting their confidence in our strategic direction, current and new products, and technology roadmaps."
On a positive note, AMD reported $197 million USD in revenue from its graphics division in Q1 2007. This represented a 19 percent gain from Q4 2006. AMD's next generation DirectX 10-based R600 graphics processor is expected to launch within the next few weeks. The top of the line
AMD ATI Radeon HD 2900 XT
will feature 320 stream processors, 512-bit memory interface with eight channels, native CrossFire support, 128-bit HDR rendering, 24x anti-aliasing and HDMI output with 5.1 surround sound.
Looking to the near future, AMD plans to get its
65nm native quad-core
out the door during Q3. AMD has high hopes for the processors which will incorporate 2MB of L3 cache and AMD Virtualization (AMD-V) technology. "We expect across a wide variety of workloads for
by 40 percent
," said AMD's corporate vice president for server and workstation products, Randy Allen in January.
The company will not, however, begin production of 45nm processors until the first half of 2008. 45nm processors won’t actually ship until the second half of 2008.
Intel is well aware of AMD's plans and many have suggested that the company released
early performance numbers for its quad-core
to divert attention away from AMD's upcoming
. Intel's 45nm
taped-out in January
and will begin shipping in the
latter half of 2007
-- roughly a year ahead of AMD's first 45nm processor.
This article is over a month old, voting and posting comments is disabled
4/20/2007 7:00:22 PM
I totally agree. Forcing a change to motherboard and RAM along with a processor is immensely stupid when your competition is kicking your butt. There's a large installed base of socket 939 users, the only dual core 939 CPU available at decent prices are the 3800s, at almost every price point (at least counting the announced Intel price cuts this month) Intel wins, and the four or five fastest Intel processors have no AMD equals. Is this really a time to be forcing a platform change to loyal customers looking to upgrade? I've been using AMD since at least my 80287 co-processor, but I'm looking at Intel for my next rig.
That ATI acquisition did them no favors either with ATI DX10 parts so far behind NVIDIA’s. It's not easy to arrange doubling the number of core businesses in which your corporate butt is kicked, but AMD seems to have accomplished it nicely. And re-branding ATI as AMD - thus driving away potential customers who have heard nothing of the acquisition or AMD video cards - is just the icing on the cake. </sarcasm>Perhaps the AMD management should go for the trifecta and start making racist remarks? </sarcasm>
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