AMD's Q4 earnings improve, but not enough
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AMD appears to be headed in the right direction with improvements in both revenue and gross margin during the fourth quarter, but that still wasn't enough to generate a profit, even excluding the effects of a hefty one-time charge.
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Considering the devastating two years Advanced Micro Devices Inc. has endured, investors braced themselves for more bad news in the fourth quarter after rival Intel Corp. disappointed Wall Street with lackluster results.
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(InfoWorld) - After watching its market share for the North American desktop PC market slip in a soft third quarter, Advanced Micro Devices Inc. (AMD) will seek greater profits in 2007 throughÂ a new family of quad-core server chipsÂ and itsÂ acquisition of graphics chip maker ATI. "From a customer perspective, our integration is completed," said Henri Richard, AMD's chief sales and marketing officer during the company's annual analyst meeting in New York on Thursday. The companies still face several years of work to reach their goal of launching a combined processor and graphics chip called Fusion, but since closing the deal in October, they have already combined sales forces, supply chains and manufacturing facilities. In the short term, that will enable "the new AMD" to benefit whenÂ Microsoft's launch of the Windows VistaÂ OS sparks increased demand for visual capability in PCs. "Vista will change the paradigm of how people relate to their PCs and their criteria for selecting devices in 2007. That emphasis on a more visual experience will give AMD an edge," Richard said. AMD will also use the ATI acquisition to enter the fast-growing consumer electronics market in 2007, selling more video processing chips as demand rises for digital and high-definition TV, and selling more embedded chips as handheld devices converge the capabilities of cell phones and PCs, he said. AMD expects 19 percent growth for its chips used in the handheld sector and 44 percent growth in digital TVs. In the meantime, AMD will focus on its bread-and-butter product, the Opteron server chip. AMD plans to increase its revenue from microprocessors and chipsets by 20 percent in 2007, twice its prediction for the industry's growth rate. Chip-making rival Intel Corp. regained some ground in the desktop and server markets in recent months with its Core 2 Duo and dual-core Woodcrest Xeon chips. But AMD is poised to defend its turf. The company demonstrated a four-chip server using laboratory versions of its "Barcelona" quad-core Opteron chip at the meeting. Compared to AMD's own dual-core server chips, the design marks a 40 percent to 70 percent improvement in processing power and a 60 percent improvement in performance per watt. AMD plans to launch that chip for high-end servers in the second half of 2007, and update it with a "Shanghai" model in 2008. The company also plans to expand from its stable of processors designed for two, four and eight-chip servers in 2007 by launching "Budapest,"a quad-core Opteron chip designed for the single-processor servers used in the small business market. AMD will also improve its Turion and Sempron notebook chips, extending battery life with a more efficient "Hawk" model in 2007 and "Griffin" model in 2008. Together, those products will help return AMD to a better mix of products, Richard said. "We had been heavily reliant on the desktop sector. Now our server and laptop segments are growing faster, so we will soon reach the industry average." AMD has already started designing an eight-core server chip, set for release in three years, but has no plans to build chips with even more cores. "I think most people recognize the industry made a mistake getting into the megahertz wars, because we should have been more focused on the efficiency of the overall platform. And we would make another mistake if we got into a core war," said Phil Hester, AMD's chief technology officer. "You'd scratch your head if someone tried to sell you a 16- or 32-cylinder car and ask 'Why on earth do I need this?' You really need something whose capabilities are matched to what you'll use it for every day."
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Intel&#39;s revenue increase for the fourth quarter fell short of analysts&#39; estimates in part because of weak prices for memory chips.
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Advanced Micro Devices Inc.'s losses were deeper than analysts feared in the third quarter, but the slumping chip maker said stronger sales of microprocessors and improving cost controls are now helping lift the company out of its financial doldrums.
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Investors care more about the drugmaker's future than its Q4 results.
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Intel enjoyed improved sales, while AMD did its best to limit the damage during a year plagued by a key product delay.
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Still carrying the weight of costs related to last year&#39;s&#160;acquisition of graphics vendor ATI, AMD recorded its fourth straight quarter of net losses Thursday.The company reported a net loss of $396 million, or $0.71 per share, for the third quarter, compared to net income of $136 million for the year-earlier quarter. Analysts polled by Thomson Financial had estimated a loss of $0.62 per share. The loss included a $120 million charge related to its acquisition of ATI last year.AMD recorded third-quarter revenue of $1.632 billion for the quarter ending Sept. 29, an 18 percent year-over-year increase.The company sold a record number of microprocessors during the quarter, AMD said in a news release. Microprocessor unit shipments increased 19 percent year-over-year and mobile processor shipments increased 68 percent, AMD said.After months of delays,&#160;AMD finally released its latest quad-core Barcelona processor in September.&#160;AMD is locked in a quad-core chip battle with Intel, which shipped more than 2 million quad-core processors during the quarter, Intel said in its earnings call on Tuesday.AMD has already lost ground in the market for server chips to Intel in recent quarters. AMD&#39;s quad-core Opteron processor, also called Barcelona, opened up a revenue stream for company during the quarter, the company said.
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Improved profits surprise Wall Street, but PC maker warns that figures are preliminary and reveals little detail.
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The latest losses at chipmaker AMD are not as bad as  expected, thanks to surging sales of laptops.
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Intel-rivaling chipmaker does not immediately explain why its first-quarter sales will fall short of its previous estimates.
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(InfoWorld) - Advanced Micro Devices (AMD) will miss its revenue goal for the first quarter of 2007 because the chip maker grew so fast that it couldn't keep up with demand from its customers, company CEO Hector Ruiz said Monday. The company is unlikely to meet its estimated revenue target of $1.6 billion to $1.7 billion for the quarter, the company said. For the same period last year, AMD brought in $1.33 billion, or $780 million excluding revenue from its Spansion memory products unit, which AMD spun off in an IPO (initial public offering) in December 2005. Although the company has gained market share for 10 consecutive quarters -- principally from rival Intel -- that trend is both good news and bad news, Ruiz told an audience of financial investors at the Morgan Stanley Technology Conference in San Francisco. "We went from being a player whose majority of sales were in the distribution channel as opposed to OEMs, to one that has changed in a very short time to having a majority of sales going to OEM buyers," he said in a reference to original equipment manufacturers. That transition happened probably faster than we had planned. A larger number of OEMs wanted our products faster than we were prepared to meet, so we were not able to feed the channel." Despite AMD's success in gaining market share, even Ruiz admitted that it may be too late to retain some disgruntled customers. "A channel partner needs a commitment for a 30- to 60-day supply of products. I couldn't give it to them, so they decided to get it somewhere else. We let down our channel partners by not being able to support them as much as they needed us. We need to get our distribution business back on track." Ruiz was contrite about the "glitch," but promised the company would quickly spring back by increasing production, particularly of its "Barcelona" quad-core Opteron chip due out in the second half of 2007. The chip will compete against Intel's "Clovertown" quad-core Xeon chip, which launched at the end of 2006. AMD has been aggressive in boosting its market share in the processor industry to nearly 25 percent and by acquiring graphics chip maker ATI in 2006. But investors have begun to grow wary since the company has not yet been able to turn those moves into profits. AMD posted a loss of $574 million in its fourth quarter, ended Dec. 31, 2006.
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SAN FRANCISCO - As expected, Advanced Micro Devices Inc.'s (AMD's) third-quarter revenue came in a little under the company's earlier predictions, but strong increases in sales of its 64-bit desktop and server processors led to the company's fourth straight profitable quarter.
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Advanced Micro Devices Inc. (AMD.N: Quote, Profile, Research) on Thursday reported a $44 million third-quarter profit from a loss a year earlier, and predicted
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Chip maker Advanced Micro Devices  Inc. AMD.N on Tuesday reported a quarterly loss after a  year-earlier profit, weighed by weaker memory chip sales and a  charge related to debt.
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Although earnings met expectations, the restaurant's comps and Q4 outlook are lacking.
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By Laurie J. Flynn  Advanced Micro Devices has said it is unlikely that the company will meet its target of $1.6 billion to $1.7 billion in revenue for the first quarter, providing evidence that the chip maker's price war with Intel was continuing to take its toll.