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Robert J. Rivet, AMD Executive Vice President and Chief Financial Officer  (Source: AMD)
Just a day after Intel's Q2 performance report, it's now AMD's turn

Yesterday, DailyTech reported on Intel's Q2 earnings. The company posted Q2 revenue of $8.7 billion USD, operating income of $1.35 billion USD and net income of $1.3 billion USD.

Today, it's archrival AMD's turn with regards to financial performance for the quarter. AMD recorded revenue of $1.378 billion USD, an operating list of $457 million USD and a net loss of $600 million USD.

This compares with revenue of $1.216 billion USD and operating income of $102 million USD for Q2 2006.

"While we made solid progress in the second quarter across a number of fronts, we must improve our financial results," said AMD CFO Robert J. Rivet. "We achieved a 12 percent sequential revenue increase, improved the gross margin and won back microprocessor unit and revenue market share."

AMD appears to have worked out problems that it had in late 2006 with OEM/channel processor distribution and attributes 38 percent sequential increase in microprocessor unit shipments to orders from Toshiba, an increased adoption of AMD-based platforms and strong initial sales of the ATI Radeon HD 2000 graphics family.

"We continue to focus on realigning our business model and reducing our capital expenditures and cost structure in the second half of the year," said Rivet.

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RE: 1.2 Billion in Losese Total Now
By smitty3268 on 7/19/2007 7:31:58 PM , Rating: 1
It's not like they're just going to run out of money to pay their employees. They'll just have to get another loan.

Looking at the details, they spent another $94 million this quarter on 1 time only ATI acquisition related expenses. When will these stop? I figured they would all occur in the 1st quarter, which had $113 million.

The bad news is that they aren't making a profit in any of their divisions. The Computing Solutions segment lost 23.5 cents for every dollar it made, Graphics 25.6, and Consumer Electronics 25.9. The last two are basically ATI, and make up about 20% of AMD.

RE: 1.2 Billion in Losese Total Now
By stryfe on 7/19/2007 8:23:22 PM , Rating: 1
Taking out another loan isn't so easy if no one's willing to lend you money. As thier financial situation worsens it will get harder to borrow money and those who will lend money will demand stiffer terms.

Taking out a loan to pay for day to day costs (especially for paying interest on other loans) isn't something a company ever wants to be doing. A loan is only ever a good thing if you can use the cash infusion to create profit growth greater than the interest on the loan.

RE: 1.2 Billion in Losese Total Now
By TomZ on 7/19/2007 8:26:44 PM , Rating: 2
True, and to that I would add that, it won't be hard for AMD to get further loans, rather it will be hard to get additional loans with favorable terms. Basically as their financial condition gets worse, the cost of them borrowing money effectively increases, typically through higher interest rates.

By tuteja1986 on 7/19/2007 11:11:32 PM , Rating: 2
Lets hope AMD doesn't go burn into total chaos ;(

Also rumors of IBM and Samsung wanting to buy out AMD is not true and if its true then they want to compete with Intel not just take the best part of AMD to integrate them and sell the rest.

RE: 1.2 Billion in Losese Total Now
By Xavian on 7/20/2007 6:33:44 AM , Rating: 2
Sony seems to have no problem getting them.

RE: 1.2 Billion in Losese Total Now
By jdun on 7/19/2007 9:51:43 PM , Rating: 2
AMD got a 3 billions bank loan to buy up ATI three quarters ago. AMD got another loan for 2 billions last quarter to pay for their upgraded fab. In three quarters they have borrow over 5 billions. That is on top of what other loans they made in the past.

Five billions loans in three quarters for an 8 billion dollar company. Even if their margin is good the interest they incur will eat any profits they would have made.

AMD can't sell off their assets because without the fabs they won't be making chips. Unlike the USA, German laws prevent mass layoff . And if they could they can't because they need these people to make the company work.

They could sell ATI tho. and buy some time.

RE: 1.2 Billion in Losese Total Now
By defter on 7/20/2007 2:43:58 AM , Rating: 2
When will these stop? I figured they would all occur in the 1st quarter, which had $113 million.

They have $1065M listed under "Acquisition related intangible assets".

Considering the terrific strenght of ex-ATI's current lineup, I don't think these "one-time" charges will stop anytime soon...

RE: 1.2 Billion in Losese Total Now
By Viditor on 7/20/2007 2:49:46 AM , Rating: 3
I don't think these "one-time" charges will stop anytime soon...

I don't think they will stop altogether, but the charges should reduce drastically after the 1 year anniversary (remember that most of this is payout of employee compensations like insurance, pensions, etc...).

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