AMD Blames Lackluster Earnings on Weak Economy

Subject: Processors | July 20, 2012 - 08:21 AM |
Tagged: quarterly earnings, loss, APU, amd

AMD recently released its Q2 2012 earnings (as did Intel), and things are continuing to look bleak for the number two x86-64 processor company. The company stated that the lower than expected numbers were the result of a weak economy and during a time of the year when people are not buying computers. The may be some truth to that as the second quarter is in the post-Christmas holiday season lul and before the big back-to-school retail push. On the economy front, it’s harder for me to say but without going political or armchair economist on you, the market seems better than it has been but is really still recovering–At least from a consumer perspective.

AMD reported revenue of $1.41 billion in the second quarter of 2012, which does not seem terrible, but when compared to Intel’s $13.5 billion Q2 revenue, and the fact that AMD’s numbers represent an 11-percent lower value than last quarter and 10-percent decrease versus Q2 2011, it’s easy to say that things are not looking good for the company.

According to Paul Lilly over at MaximumPC, when breaking AMD’s numbers down by business segment it gets even worse. Its Computing Solutions business fell 13-percent versus the previous quarter and Q2 2011. On the other hand, the company has the ever-so-slightly better news that the graphics card division stayed the same versus last year and was down 5-percent versus last quarter. The company was quoted as stating that the respective revenue drops were due to lower desktop sales in China and Europe and a “seasonally down quarter.”

PC Perspective’s Josh Walrath recently wrote up an editorial (note: pre-earnings call) that talks about AMDs new plan to focus on APUs, take on less risk, and push out new products faster. As a future-looking article, it talks about the impact of the company’s upcoming VIshera and Kaveri processors as well as AMD’s increased focus on heterogeneous system architectures. It remains to be seen if that new path for company will help them to make money or if it will hurt them. AMD cautions that Q3 2012 may not see increased revenue, but here’s hoping that they will be able to pull together for a strong Q4 and sell chips during the big holiday shopping season.

I for one am excited about the prospects of Kaveri and believe that HSA could work and is what AMD needs to focus on as it is one advantage that they have over NVIDIA and Intel – NVIDIA does not have an x86-64 license and Intel’s processor graphics leave room for improvement, to put it mildly. AMD may not have the best CPU cores, but it’s not an inherently bad design and where they are moving with the full convergence of the CPU and GPU is much farther ahead of the other big players.

Read more about AMD's Q2 2012 earnings (transcript).

Source: Maximum PC