Preceding the earnings report was news from AMD that it would be taking a charge
of more than $900M USD for losses based on the bill for its acquisition of
ATI, its flash endeavors, and its struggling ATI TV and consumer electronics
subunits. This news set predictions of losses rather high.
Whereas Intel reported profits beating expectations, AMD reported losses
beating expectations. AMD bled $1.19B USD in Q2 2008, up from $600M USD a
year ago and $358M USD last quarter. The adjusted losses, which take one
time events into account, totaled 60 cents a share, worse
than analyst predictions of 52 cents a share.
Depending on the metric you view, AMD revenue was either up or down. AMD
announced Q2 2008 revenue of $1.349B USD, up 3 percent from Q2 2007, but down 7
percent from Q1 2008 (curiously AMD's press release chooses to assert this
negative comparison before the positive one). Analysts on Wall Street had
been hoping that it would show revenues of $1.45B USD, but yet again AMD left
them with disappointment.
Gross margin, an important indicator of profitability, again, was up compared
to last year, but down compared to Q1 2008. The margin was 37 percent,
excluding the impact from the sales of portions of its 200mm infrastructure,
compared to 41 percent in Q1 2008 and 34 percent in Q2 2007.
As far as good news from AMD, about the only clearly good news it could offer
were in terms of technology, which was also a slightly mixed bag. AMD
strongly pushed out Opteron server technology, which was viewed as a success.
In terms of technology, AMD's greatest Q2 2008 victory came from acquisition in
terms of the 4000 series of graphics cards -- the 4850 and 4870 blew away
similarly priced offerings from NVIDIA. The impending release of the 4870
X2 in August/September, which early
reports show to compare favorably with NVIDIA's similarly priced high-end GTX
280, could erode into one of NVIDIA
AMD Reports Q2 Results
While Intel merrily
report rising Q2 profits and revenue, Advanced Micro Devices Inc. (AMD)
sang a far different tune. The smaller major player in the microprocessor
industry reported earnings which disappointed
even investors expecting less than a stellar performance.