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
July 20, 2012 | 10:25 AM - Posted by Daniel Meier (not verified)

If they had made Bulldozer what they have set it to be, i would have had no problem with giving them my money.

July 20, 2012 | 10:30 AM - Posted by Tim Verry

Heh, yeah I'm sure they wanted it to be better too ;). Here's hoping Vishera can get them closer to Intel.

July 20, 2012 | 05:40 PM - Posted by Wolvenmoon (not verified)

Something about their announcing they were no longer going to try to compete with Intel for the performance crown may have something to do with this.

July 21, 2012 | 08:50 AM - Posted by Anonymous Coward (not verified)

Blaming the weak economy eh? When intel is repeatedly breaking its own records for profits, right?

These people are so dishonest they should go to prison. They have a fiduciary duty to the owners of the company, the shareholders.

The leadership of this company is beyond repair. The day will come soon when AMD will be delisted from the stock exchange and will end up being a shell of a company acquired by someone for their patents.

The only way to save this company is to make a giant org chart, draw a line halfway down the pyramid, and immediately fire everyone in the top half.

July 23, 2012 | 08:18 PM - Posted by Anonymous (not verified)

did you go to the occupy wall street protests?

July 24, 2012 | 10:00 PM - Posted by Anonymous Coward (not verified)

Cry more
AMD is doing really bad both in terms of what the people think of their technology and in terms of finances. It sure as hell isn't the fault of the janitor. The CEO gets paid for one thing and one thing only: to have a vision for the company and to facilitate its accomplishment. That's it. But the last 2 CEOs have had no vision at all. The future is fusion. YEa, the future is chapter 7, or 13 if they're lucky. Just wait.

July 26, 2012 | 02:41 AM - Posted by Jim (not verified)

Fusion my ass, the future never was fusion for desktop computers!

Now i only need to upgrade my graphic card to keep up with the latest computer games, if the future is fusion, i need to upgrade both the CPU and GPU together, wasting the good CPU.

Fusion makes no sense at all, it is slower than CPU and GPU unfused, more costly to upgrade, AMD should really change this strategy and focus on graphics.

July 26, 2012 | 08:06 PM - Posted by Cannyone

When I consider the 'big picture', from an economic standpoint, then I'd say part of their problem IS the stagnant economy. And its not really fair to compare them to Intel. Who are benefiting from different market segments (like SSDs). Still the bottom line is that people expect them to be competitive and lately they have not managed to do so. Either in the processor/chipset market, or in the graphics market. And I'd say if they want to survive they will have to find ways to improve.

It's just that I'd hate to see them go under. That would be a disaster for the PC market!

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