AMD's revenue down 10%, workforce down 15%

Subject: General Tech | October 19, 2012 - 11:04 AM |
Tagged: quarterly earnings, downer, billions, amd

The hard numbers have arrived and AMDs quarter was every bit as bad as investors had feared, with a non-GAAP net loss of US$150 million and a $0.20 loss per share.  The actual income for this quarter was $1.27 billion, the low end of the predictions that were made by analysts and with the sluggish movement in the PC market the choice has been made to lower operating costs as opposed to trying to increase revenue.  To do so they will be reducing their global workforce by 15% over the coming quarter and restructuring the company with the goal of reducing operating costs by 25% so that a $1.3 billion dollar quarter would be a break even point, not a loss.  The Register details other changes Rory Read is planning on implementing, more of a focus on chips for servers and embedded cores and SoCs for communication and industrial applications.  As well AMD's win on the console side, with the Sony PS4 using AMD for both CPU and GPU as well as the WiiU which will use an AMD GPU and the as yet unnamed new XBox, all of which will garner licensing incomes for AMD for years to come.  The talk about ultra-low-power chips for tablets and ultrabook like products is hopeful, though it is unlikely to be a major revenue source it would be a good move to attempt to grab more market share in that segment.  DigiTimes also weighs in here.

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"One week ago, AMD warned investors that its financial results for its third quarter of 2012 were going to be worse than it had previously estimated, with revenues down about 10 per cent from the previous quarter rather than the 1 per cent, plus or minus 3 per cent, that they had forecasted earlier.

They were spot on – not that being correct about such a disappointing result will win them many friends on the Street.

After the markets closed this Thursday, AMD announced that its Q3 2012 revenues were $1.27bn, which hit that prediction of a 10 per cent quarter-to-quarter slippage."

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Source: The Register
October 19, 2012 | 12:00 PM - Posted by Ryan Andres (not verified)

As well AMD's win on the console side, with the new Nintendo PS4 using AMD for both CPU and GPU...

It should be Sony PS4, not Nintendo PS4.

October 19, 2012 | 03:24 PM - Posted by Jeremy Hellstrom

Bloody consoles ... fixing, thanks.

October 19, 2012 | 12:24 PM - Posted by Humanitarian

Poor AMD, always feel bad when I hear they're in financial turmoil.
I wonder how this will effect the CPU department after all these cuts. With Intel catching up fast on the graphics and starting to throw money at mobile computing I can't see where AMD will stand out from the competition except maybe low cost production.
Looks like I better start worshiping our new Intel overlords.

October 19, 2012 | 01:33 PM - Posted by Rick (not verified)

i would use this cpu to make the perfect htpc. All the power needed play hd video and all your games.

October 19, 2012 | 01:33 PM - Posted by Rick (not verified)

oh, my bad, posted this in the wrong spot!!

October 20, 2012 | 02:51 AM - Posted by razor512

Logic, My product is not doing well because someone else released something better. I know of the perfect way to fix this, I will cut my way to success by slowing the advancement of my product in a highly competitive field, that will make people flock to my products.

AMD needs to work on capturing more of the market, get back into the high end CPU market. Cutting staff is not the best way to do this, when you downsize, you make your product less desirable which in tern makes your product sell even less; it is basically a downward spiral that AMD is in.

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