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Another big quarterly loss for AMD

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Old 10-19-07, 01:28 AM Thread Starter   #1
muddocktor
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Another big quarterly loss for AMD


I just came across this at The Inquirer, with links to AMD's website backing up their news.

The last quarter, AMD has lost another $396 million. Inq link AMD link

Man, they are bleeding so much money I just don't see how they will stay a viable company even in the near future, especially since it seems like they can't even come out with Barcelona with decent clock speeds. I sure hope someone with deep pockets is looking to buy a company with some good designs in microprocessors because they gotta be running out of money.
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Old 10-19-07, 01:55 AM   #2
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Bad story indeed, just hate to see AMD is getting weaker from time to time ! Bad for CPU industry and for the consumer !

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Old 10-19-07, 02:00 AM   #3
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But their stock is no worse off than it was in 2005. They're still in the game, it just always takes them a lil longer.

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Old 10-19-07, 06:03 AM   #4
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Quote:
Originally Posted by AngryArtichoke View Post
But their stock is no worse off than it was in 2005. They're still in the game, it just always takes them a lil longer.
I know. was hopping their stock would have crashed a bit, so I could have jumped on some shares, as I know AMD will survive..or worst someone will buy them out.

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Old 10-19-07, 07:34 AM   #5
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Quote:
Originally Posted by AngryArtichoke View Post
But their stock is no worse off than it was in 2005. They're still in the game, it just always takes them a lil longer.
I've been parroting this a lot lately, but AMD is in serious financial trouble. Instead of typing up what I've typed before, I'll cut-and-paste a previous post:

Quote:
Originally Posted by aaronjb
I can tell you that AMD has very serious cash flow issues. Serious enough to miss payments to contract employees. Serious enough to lose top engineers because of a lack of job security. Serious enough to be shopping their fabs around for a buyer. Serious enough to need to be bailed out to the tune of multiple billions of dollars. When those loans come due, AMD will have no choice but to perform radical restructuring.

AMD isn't just a ship without someone at the helm. It's a ship without a captain that has no fuel in the tanks. Look at the financials, and listen to what the goold ol' Street it saying. As a public company, shareholders won't put up with this for long. AMD won't just disappear, but it's unlikely that the company will exist in its current form by 2009. You'll likely see units split up and sold off, making for several more streamlined companies with less debt overhead. The ATI purchase put the entire company at risk of insolvency.

This isn't just another flip/flop in the performance market. AMD has very tangible issues now, and the likely recourse is a partitioning of their operations. Sapphire is a likely buyer for their ATI engineering unit, but who knows what will happen with all of those lovely fabs.
In short, everything went wrong for AMD at the same time. Even if Fusion is a huge OEM success, a restructuring will be in order.

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Old 10-19-07, 09:24 AM   #6
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As an Intel guy, I dont even like to read this. Competition is good for everyone.

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Old 10-19-07, 11:06 AM   #7
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Not cool to see AMD losing more money, but at least they didn't lose as much as they did in the second quarter.

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Old 10-19-07, 12:35 PM   #8
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I dont' think it's as bad as they make it sound. Sure to you and me $400 million is a ton of money, but to a large international company it's not that much. Of course the goal is to make money but sometimes you have to lose some in order to make some. And don't miss the fact that financial statements can be looked at various ways.

AMD Q3 consolidated financial statements (PDF)

If you look at the financial statements, you'll see that when they bought ATI they also brought in alot of R&D and Admin costs. You'll see that those costs are decreasing over time. Also note, that they didn't lose 396 million in three months, that is over the course of the year. You'll notice last quarter they were at a loss of 600 million. So over the course of three months they've basically made 200 million to get that loss to decrease. Their revenue is up for the same time last year. Really it looks to me that they are still trying to integrate ATI. The inventories number looks weird to me. It's fine as long as they mean raw materials. If it's processors that they haven't sold, that could be a problem down the line. I don't want to dig through the full report to find out right now though.

That's my layman accounting student analysis of AMD. It may be full of mistakes. I think I'll ask my teacher what he thinks. Hopefully he will agree with me.
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Old 10-19-07, 01:55 PM   #9
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Those are dismal financials by any stretch, particularly when your competition - Intel and NVIDIA, in this case - are swimming in revenue and excess cash. Factor in the horrible mess that the ATI purchase has made of the AMD/ATI management structure and R&D efforts, and I doubt they'll wade through this mess without the shareholders crying for a sell-off.

When a chip company is looking to sell of their newly-constructed fabs to pay off billions in debt, then the outlook can't be good.

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Old 10-19-07, 04:12 PM   #10
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Maybe Intel will buy them.
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Old 10-19-07, 04:44 PM   #11
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Quote:
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Maybe Intel will buy them.
Ah, I see how you got your rank and title

AMD is hosed. They need to make like intel and innovate their way out of their current crisis.

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Old 10-19-07, 05:17 PM   #12
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Ah, I see how you got your rank and title
If it's taken you this long to figure that out has it occurred to you that maybe you still haven't gotten it right?
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Old 10-19-07, 05:20 PM   #13
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Quote:
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If it's taken you this long to figure that out has it occurred to you that maybe you still haven't gotten it right?
*makes note to add sarcasm tags*

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