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AMD "Barcelona" die shot  (Source: AMD)
AMD records a loss for the third straight quarter

Earlier this week, DailyTech reported that were things were looking rosy for the Intel folks in Santa Clara, California. The company reported that its profits were up 43 percent on revenues of $10.1 billion USD.

Today, it was AMD's turn to report its Q3 earnings results. AMD recorded revenue of $1.632 billion USD -- this represented an 18 percent increase from Q2 2007. However, AMD reported an operating loss of $226 million USD and a net loss of $396 million USD -- this compares to a $611 million USD net loss for Q1 and a $600 million USD net loss for Q2.

Part of AMD's losses during Q3 can be attributed to its acquisition of ATI Technologies in 2006. The company is still reeling from the purchase and recorded a $78 million USD charge as a result. The ATI-related charge involved costs related to integration and severance packages. Another $42 million USD charge was recorded in relation to Spansion.

On a more positive note, the introduction of ATI's Radeon HD 2000 series GPUs resulted in a 29 percent increase in graphics revenue to $252 million USD. AMD also noted that its Radeon HD 2000 series GPUs are now featured in desktop and notebook systems from Dell, HP, Lenovo and Toshiba.

During 2007, AMD has racked up enormous debt and experienced losses in every quarter. Former ATI president CEO Dave Orton left in July after successfully leading the charge to integrate the two tech companies. AMD also lost executive vice president and chief sales and marketing officer Henri Richard in late November. The following month, AMD vice president of worldwide sales Rick Hegberg packed his bags and headed for the door.

AMD still has room for improvement in the form of its new quad-core 65nm Barcelona architecture. The company launched its Barcelona-based Opteron server processors in early September with speeds up to 2.0GHz. 2.3GHz models are in the pipeline for Q4 2007.

Quad-core desktop Phenom 2.2GHz (Phenom 9500) and 2.4GHz (Phenom 9600) processors will launch late next month, while a 2.6GHz (Phenom 9700) processor will be ready for December. AMD will later tackle the high-end desktop market with the Phenom FX-82 during the first half of 2008.

AMD also threw a bit of a curve ball with the announcement of a triple-core Phenom processor family. The triple-core processors logically fit between AMD's dual-core and quad-core offerings and will bring "true multi-core technology to a broader audience," according to the company.

The next few months won't be easy for AMD, however. Although it has a new CPU architecture on tap, Intel is not standing still. Intel is always one step ahead of AMD when it comes to process technology and its 45nm Penryn-based Xeon processors will launch November 12, while its Penryn-based desktop processors should be available before the end of the year.

In addition, Intel will refresh its 45nm architecture in the summer of 2008 with Nehalem, while a 32nm refresh called Westmere will be in place for 2009.



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By crystal clear on 10/19/2007 11:50:17 AM , Rating: 1
Some comments made at the conference call that deserve a response.

Ruiz noted that worldwide demand for PCs "is very, very strong." However constraints on plastics, displays and possibly batteries could hamper sales.



This fellow always has some lame excuse to save face,but we can see through these excuses-expect further losses.

About breaking even....

Very ambitious targets/plans but poor executions also vague & unsure projections but they're not going to get to break even until the second half of 2008.

Intel, which brings in more in profit than AMD produces in revenue.


Chief Financial Officer Robert Rivet reiterated his previous comments that getting back into the black will require $2 billion in revenue.

"We'll see in the fourth quarter. That's our goal is to break even. Maybe we have a shot at it," Rivet said.

But AMD's actual guidance for the fourth quarter was somewhat vague, with the company saying only that in the "seasonally up forth quarter, AMD expects revenue to increase in line with seasonality."

Company executives demurred when asked to quantify what seasonal growth in the fourth quarter entails, but noted that Intel -- which has projected a weaker-than-seasonal fourth quarter --- provides a valid view of current market conditions.



The next financial analyst day (Q4)will be on Thursday, December 13th in New York City.

Links-

AMD Q3 2007 Earnings Call Transcript

http://seekingalpha.com/article/50491-amd-q3-2007-...

The official press release-

http://www.amd.com/us-en/Corporate/VirtualPressRoo...




By Ringold on 10/19/2007 3:16:54 PM , Rating: 2
Their goal is to break even.. Wow. Ambitious lot, they are. Glad I'm not a shareholder.

Frankly, I hope they drop the ball, the ball turns out to be an LBO grenade, and some private equity group swoops in, buys them on the cheap, removes the scorched bodies of most of the management and actually turns the boat around. I think the fact that so much of their top brass has left might indicate that insiders agree that the future of their careers may be elsewhere, either from the inside or from without.

I suppose it could also mean they were clearing house but it seems so much more often the case that it's simply the rats fleeing a sinking ship.

As a fan of the underdog AMD though I don't fear for its survival; it's "too big to fail", thankfully. Someone will save her sooner or later.


By clovell on 10/19/2007 4:29:08 PM , Rating: 2
Considering the losses they've been suffering, their focus needs to be on breaking even. Anything more is a fantasy at this point. This isn't a marketing problem, it's a pipeline problem - they take time to get worked out.


By Ringold on 10/21/2007 11:48:44 PM , Rating: 2
Pipeline problems don't evolve overnight. It's an execution problem. A takeover, followed by the installation of competent management (a takeover wouldn't happen unless investors thought they could better manage it), could solve such problems moving forward. And hey, perhaps AMD can try it's very best but just doesn't have access to the kind of capital needed to compete against Intel. If they were brought under the wing of a much larger group they'd have better access to it. I don't know which might be at the core of the problem but the solution is the similar.

I hope they can stick it out, but I also realize that that is also a purely emotional position.

There also should be some accountability, btw. If a submarine surfaces and sinks a Japanese fishing boat, the Captain gets thrown under a bus. Ruiz floods Wall Street with red ink and we should cut him a break?

Well, if someone comes and buys up AMD, the free market will have given its verdict.


By crystal clear on 10/20/2007 5:02:44 AM , Rating: 2
Yes as usual you are right in your analysis.


By crystal clear on 10/20/2007 7:12:29 AM , Rating: 2
AMD Recommends Rejection of Below-Market “Mini-Tender” Offer from TRC Capital Corporation

http://www.amd.com/us-en/Corporate/VirtualPressRoo...


By crystal clear on 10/20/2007 6:20:00 AM , Rating: 1
Heres a quote for AMD-

"Work your way up or rust your way out."


"There's no chance that the iPhone is going to get any significant market share. No chance." -- Microsoft CEO Steve Ballmer

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