AMD loses $1.18 billion, and appoints new CEO

Posted at: 12:16pm 18th July 2008 by Ben Hardwidge

AMD elects Dirk Meyer as thew new CEO to replace Hector Ruiz

We all suspected that AMD wasn't in a strong financial position any more, but the truth is actually far more shocking. The company has just announced its financial results for the second quarter of this year, in which the company reports a net loss of $1.189 billion, or $1.96 per share. As a point of comparison, AMD posted a net loss of $600 million US for the same period last year.

When the financial results were released yesterday, AMD also announced that the company’s chief executive officer (CEO), Hector Ruiz, would be replaced by Dirk Meyer. However, Ruiz hasn’t left the company, and a spokesperson from AMD told Custom PC that ‘instead he will become the company’s executive chairman, focused on ensuring a smooth executive leadership transition, driving the company’s asset smart strategy to completion, and guiding high-level government and other strategic partner relations.’

Despite the grim financial results, AMD is still positive that it can turns things around. AMD’s chief financial officer, Robert J Rivet, partly blamed ‘challenging macroeconomic conditions’ for the results. However, he said that AMD will ‘remain committed to achieving operating profitability in the second half of the year based on the continued ramp of new products, increased market penetration of our differentiated solutions, and continued actions designed to reduce our breakeven point.’

We’re not particularly convinced by this marketing waffle, but it’s hoped that Dirk Meyer’s election to CEO will help AMD’s situation, as many people blamed Hector Ruiz for AMD’s current predicament. However, AMD was keen to point out Ruiz’s achievements as CEO. AMD’s lead independent director, Robert Palmer, said that ‘Under Hector’s strong leadership, AMD drove the industry adoption of pervasive 64-bit and multicore computing, became a trusted enterprise-class partner to leading technology suppliers and significantly expanded its global footprint in high-growth markets like China.’

Meanwhile, new CEO Dirk Meyer says he’s ‘tremendously excited by the opportunities ahead for AMD,’ and pointed out that it’s currently the only company ‘that possesses expertise and leadership in both x86 microprocessor and graphics technology.’ He also promised that the company was ‘in the midst of re-shaping AMD’s business model with the goal of delivering sustained profitability through a focus on the core technologies that differentiate AMD. My immediate priority is to work with the leadership team to accelerate this transformation.’ However, he added that Ruiz had been an ‘excellent leader, mentor and friend’ while he was CEO.

Is there hope for AMD if it turns round its business strategy? Was this the right time for Hector Ruiz to be replaced as CEO? Let us know your thoughts.