AMD publishes Q2 2007 financial results

[benbaked]

http://www.amd.com/us-en/Corporate/VirtualPressRoom/0,,51_104_543~118383,00.html

SUNNYVALE, Calif. -- July 19, 2007 --AMD (NYSE: AMD) today reported financial results for the quarter ended June 30, 2007 . AMD reported second quarter 2007 revenue of $1.378 billion, an operating loss of $457 million, and a net loss of $600 million, or $1.09 per share. These results include an impact of $130 million, or $0.24 per share, from ATI acquisition-related and integration charges of $78 million, employee stock-based compensation expense of $31 million, severance charges of $16 million and debt issuance charges of $5 million. In the first quarter of 2007, AMD reported revenue of $1.233 billion and an operating loss of $504 million. In the second quarter of 2006, AMD reported revenue of $1.216 billion and operating income of $102 million.

...

“While we made solid progress in the second quarter across a number of fronts, we must improve our financial results,” said Robert J. Rivet, AMD’s Chief Financial Officer. “We achieved a 12 percent sequential revenue increase, improved the gross margin and won back microprocessor unit and revenue market share. Strong distribution channel demand, initial sales to Toshiba, and a broader adoption of AMD platforms led to a 38 percent sequential increase in microprocessor unit shipments. In addition, our Graphics business gained momentum at the end of the quarter as we began shipping the new ATI Radeon HD™ 2000 family of graphics processors.

“We continue to focus on realigning our business model and reducing our capital expenditures and cost structure in the second half of the year.”

Second quarter 2007 gross margin was 34 percent, excluding stock-based compensation expense, acquisition-related and severance charges, compared to 31 percent in the first quarter of 2007 and 57 percent in the second quarter of 2006. The increase from the prior quarter was largely due to increased microprocessor unit shipments. The second quarter gross margin was impacted by a write-off of older microprocessor inventory of approximately $30 million.

...

Computing Solutions
Second quarter Computing Solutions segment revenue was $1.098 billion, compared with $918 million in the first quarter of 2007. The 20 percent sequential increase was primarily due to a 38 percent increase in microprocessor unit shipments, offset partially by lower average selling prices (ASPs) for desktop microprocessors. Second quarter server, mobile, and desktop microprocessor revenue increased sequentially. Mobile processor unit shipments increased 21 percent sequentially and 82 percent year-over-year.

Graphics
In the seasonally down second quarter, Graphics segment revenue of $195 million was flat from the first quarter of 2007. Initial sales of the ATI Radeon HD 2000 family of graphics processors were strong in the channel, and design win momentum with key mobile and desktop OEMs continues to grow.

Consumer Electronics Second quarter Consumer Electronics segment revenue was $85 million, compared with $118 million in the first quarter of 2007. The sequential revenue decline of 28 percent was largely the result of lower handheld unit sales and revenue, partially offset by increased digital TV processor revenue.

Additional Highlights

* Toshiba chose AMD as a strategic supplier for its new series of Satellite notebook computers powered by an AMD platform featuring AMD Turion™ 64 X2 dual-core mobile technology and the AMD M690 chipset.
* Customers continued to adopt AMD-based solutions across a broader portion of their product offerings:
o Acer launched three consumer Aspire notebooks and three commercial TravelMate notebooks based on AMD Turion 64 X2 dual-core mobile technology.
o Dell expanded its AMD-based commercial solutions with the launch of a new AMD-based Latitude notebook and OptiPlex™ desktop. Dell also added ten new PowerEdge™ servers powered by AMD Opteron™ processors and two new Dell Inspiron™ desktop systems powered by AMD Athlon™ X2 microprocessors. The AMD-based Dell Inspiron 531 PC received editors’ choice awards from PC Magazine and CNET.
o Fujitsu-Siemens announced a new Amilo notebook based on AMD Turion X2 dual-core mobile technology.
o HP announced two new HP Blade PCs based on single-core AMD Athlon 64 and AMD Athlon 64 X2 dual-core processors.
o Sun Microsystems unveiled its new Blade 6000 server based on AMD Opteron processors.
* AMD announced that initial revenue shipments of the industry’s first native x86 quad-core processor, “Barcelona,” will commence in the third quarter in both standard and low-power versions. AMD broadened its portfolio of product offerings in the quarter with the introduction of:
o The ATI Radeon HD™ 2000 series, a top-to-bottom line of ten discrete graphics processors for both desktop and mobile platforms that deliver the Ultimate Visual Experience™ through immersive HD gaming with DirectX® 10 and HD media playback.
o Three new AMD Opteron processors, models 1222 SE, 2222 SE, and 8222 SE.
o The AMD Turion 64 X2 dual-core mobile technology TL-66.
o The AMD Athlon 64 X2 dual-core processor 6000+ and 5200+.
o 45-watt energy-efficient AMD Athlon X2 dual-core processor BE-2350 and BE-2300.
* AMD disclosed details of its next-generation platform for notebook computing, codenamed “Puma.” The platform pairs AMD’s next-generation notebook processor, “Griffin,” with the next-generation AMD “RS780” mobile chipset. “Puma” represents one of the first results of the “new AMD,” delivering an optimized mobile solution with extended battery life, graphics and video processing enhancements and improved overall system performance.
* The Italian stock exchange, Borsa Italiana, joined the growing roster of global exchange customers running their business on AMD Opteron processor based technology, including NYSE Group, Inc., the International Securities Exchange’s Stock Exchange, London Stock Exchange, Luxembourg Stock Exchange, Montréal Exchange and Philadelphia Stock Exchange.

Current Outlook
AMD’s outlook statements are based on current expectations. The following statements are forward looking, and actual results could differ materially depending on market conditions and the factors set forth under “Cautionary Statement” below.

In the seasonally up third quarter, AMD expects revenue to increase in line with seasonality.

 

[IAmMoen]

well at least their revenue hasnt taken a huge dive. The operating loss on the other hand....

 

[White_Pawn]

that doesn't look good. Then again, it was expected since the arrival of conroe.

 

[LilBuddy]

Not too bad.

 

[Mr.Guvernment]

^^ not too bad.... not too good either.

 

[Kuroimaho]

Not too bad.

Just 40% more loss per share than predicted, makes me wonder what would be too bad...

 

[LilBuddy]

Just because a company loses money does not mean they are doing bad.

 

[zexmarquies01]

Just because a company loses money does not mean they are doing bad.

yeah, they could do better...but their still alive

and remember people...AMD owns ATI now...and ATI is the brand of video card both the Xbox360 and the Wii use. Even though that doesn't equate to sure fire profits, it does mean that amd IS making sales.

At least ATI isn't backing up the PS3 only, like Nvidia is...thats gotta suck ( but would have been sweet if ATI could have gotten their hands in all 3 consoles! ).

Lets not forget that alot of consumer electronics, such as DVD players also use ATI.

i'm not saying ATI will keep them around permanently, but they are making sales, and with the purchase of ATI, the markets which they can sell to has increased quite a bit.

As the "additional Highlights " shows, Other company's are going with AMD, as well as selling AMD based hardware along side Intel.

They may not be posting a net profit, but they arn't doing TOO bad. they could be doing MUCH worse. AMD is here to stay for a good while longer.

It will take much more than a smack from intel's processors to cause AMD's pocket book to completly dry up. Yeah, intel Can/does/has/will hurt them when it comes to profits...but there would need to be much more than just intel to kill AMD.

 

[Kuroimaho]

Even if the company took 5 billion loan in the last 2 years ?

 

[Thund3rball]

What would you expect to read at this time? Right now alignments and small revenue increases/decreases here and there is all your going to get without a heavy dose of the "New AMD". It's just drops in the bucket IMO.

 

[zexmarquies01]

Even if the company took 5 billion loan in the last 2 years ?

yeah, they took out a 5 billion dollar loan...but for a reason..

it would have cost them much more to start up their own Graphics devision, and compete with ATI and Nvidia. Much easier, and costs less to just buy ATI. ( that is, factoring in building new plants, cost of research that they don't have quite as much experience in, and marketing to compete with AMD/ATI, if they tried to start up their own graphics devision. )

Buying ATI expanded their market base quite a bit, Which branches even farther away form the computer world that AMD mostly works in.

also, with them owning ATI, they also own the ATI chipset. Its only a matter of time before they make a chipset that works better/more optimally with an AMD based processor. By having an AMD CPU, an ATI/AMD video card, and an ATI/AMD Chipset, whenever they sell such a computer, they get payed multiple times with one sale.

I know i keep beating the ATI thing to death, but in the end, i honestly believe it was a good choice. It grealty expanded their market to The console industry, the Video card market, and the handheld market ( which includes Cell phones, Handhelds, and tablet PC's. )

As i said, it will take more than just intel to bring AMD down, Since AMD has put themselfs across so many markets.

 

[AngelfireUk83]

Thats not as bad as wall street predicted but remember if they got there products out it would of been a lot less there was R600 and that was delayed as well HD 2400, 2600 & 2900 series cards where late. It was expected non the less just hope now they can turn it back round at least for the 3rd Quarter.

 

[hUMANbEATbOX]

yeah, they took out a 5 billion dollar loan...but for a reason..

zex, i agree, ATI is a MAJOR asset. ATI is the company that put NV in their place for a solid 2 years with the 9700pro, that being their first big victory, and they did follow up. they are also the company that powers millions and millions of electronics devices, from dvd players to cell phones.

at this point, with the way the latest release of ATI desktop cards has gone, i just hope that they can keep the console dominance that they have enjoyed (mind you, this is guaranteed for at least a few years, until xbox 720, ps4 and the nintendo wiiiiiiiiiiiiiiiiie are brought to market). the delays with the 2x00 cards have nothing to do with AMD at all. even if they never bought ATI, the cards would still be late, so that was a given when AMD made the purchase, they knew what they were getting into there. i'm not one to predict doom for AMD. i think they need a barnburner of a cpu and soon, but i also know that they have assets they can use to buy some time.

 

[zexmarquies01]

YOUR ENTIRE POST

YAY, someone else agrees with me!

but yeah, ATI is a HUGE asset, that just hasn't shown its shine yet.

like you said about the consoles, there is a few years of production ahead of ATI at the moment. only 9.3 million Wii's, and 10.1 million 360's sold so far. and those numbers are NOTHING compared to the PS2. the PS2 has about 65 MILLION sales.

You can almost guarantee the 360 will reach 25 million, and if the wii's demand stays up, it will reach that just as easily. thats ALOT of ATI video cards. and alot of profit for AMD/ATI.

and as mentioned, the PDA's, Handhelds, Cell phones, DVD players. ATI is completely integrated with the home consumer electronics, and most people don't realize that.

the purchase of ATI will eventually show how good of a choice that was...but like all good things...it WILL take some time.