Lower than expected demand for AMD's products and a slow market in general have been blamed for a massive 10 per cent quarter-on-quarter drop in revenue.
AMD's latest financial results demonstrate just how much the company needs its latest Trinity accelerated processing units (APUs) to be a success: the company's revenue has dropped by 10 per cent quarter on quarter.
While the company had warned its investors that a dip was on the way, it drastically underestimated the extent of the problem: rather than the predicted one per cent revenue drop, the company's third quarter revenues are down 10 per cent compared to the previous quarter.
It's not just revenue, either. Margin - the profit made on each sale - is down to around 31 per cent, from a forecast 44 per cent. Although belt-tightening measures at the company helped trim operating costs by 7 per cent quarter-on-quarter, it's clear that something significantly more drastic is required to keep its investors on-side.
AMD has put the blame for the significant shortfall on a general slowdown in the market - with many people who would normally be buying new computers waiting for the release of Windows 8 later this month - along with a drop in demand for selected products. This latter gave AMD a serious hit to its margins, with an estimated $100 million inventory written down - suggesting AMD produced hardware on a volume which significantly exceeded demand.
Since announcing the results, investors have reacted surprisingly positively: although pre-market trading saw the company's stock drop by 8.13 per cent, it has since recovered to $3.20 per share - just $0.05 below its ending price on Tuesday.
The company can't rely on the generosity of investors for long, however. AMD is going to have to prove itself in the next quarter - which means further cost-cutting measures, smarter production schedules and a big push for its latest budget- to mid-range Trinity APU chips.
39 Comments
Discuss in the forums ReplyI really like the APU's they've put out so far :(
Anyway, didn't they get that guy from Intel that was good at drawing processors or something?
How many times will we all say the above in an AMD topic about them being crap?
Stick a fork in them, they're done!
Would the arguement now be for ARM to be Intel's nearest rival?
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I think AMD's circling the drain as far as retail CPUs go. It's impossible to justify and FX chip when an i5 is faster across the board, cheaper and uses less power all at once.
Now if they took the FM2 set up to higher performance levels that would be interesting. Quad/hex core processor and a 78xx graphics chip? A true all in one chip for the high end would be interesting. Although I shudder to think of the tdp...
http://www.telegraph.co.uk/technology/9601247/PC-market-to-shrink-for-first-time-in-a-decade.html
It seems even Intel is not immune from this:
http://newsroom.intel.com/community/intel_newsroom/blog/2012/09/07/intel-lowers-third-quarter-revenue-outlook
"Intel Corporation today announced that third-quarter revenue is expected to be below the company's previous outlook as a result of weaker than expected demand in a challenging macroeconomic environment. The company now expects third-quarter revenue to be $13.2 billion, plus or minus $300 million, compared to the previous expectation of $13.8 billion to $14.8 billion."
If the juggernaut which is Intel is having lower sales than expected,then a much smaller company like AMD is hardly likely to be able to do any better IMHO.
I didn't hear that much about shortages in production and an inventory write down of $100m says they have plenty of stock so where are all these desktops and notebooks ?
I've been looking to buy an A8-3870 desktop for a friend (will wait for A10 now) and there are very few choices out there and quite a few of them are overpriced looking at the component costs. Unless you specifically look hard for and AMD unit - you are just not going to find one, it's like AMD are giving the business to Intel....
Do what Intel did with the Core2's; Pull out something impossibly good and walk all over Intel for a generation. That's all that will save AMD from continually loosing market share if this keeps up. FX was a big, brave idea and if they fix the bugs in it (Including the hideous memory controller issues); It'll be much better for it, but they needed that back at launch, i'm afraid it'll be too little too late if this keeps up.
Definitely the correct use if you're living in fear of an advancing Roman legion but here and now in 21st century, it's wrong more often than it's right. (But it does depend on which dictionary you use)
The 'historic' usage does indeed mean to put one in ten to death, but the correct modern usage is to remove a large portion of something, or reduce the strength or effectiveness of something.
"Their striker decimated the opposing teams defence" means the defence was outplayed. It doesn't mean a tenth of them were run through with a Roman Spatha.
"In the year 18 the legionaries of third legion Augusta were decimated under orders of Lucius Apronius" means that one in ten were killed by their new commander.
There exists an educated cross section of people who bring out their definition of decimation as an act of linguistic oneupmanship. I know this because I used to do it myself - getting annoyed when I heard 'incorrect' usage of the word.
The trouble is... and this really annoyed me when I found this out... it's not actually correct. It's wrong to criticise those that use decimation to mean something other than to kill one in ten.
Like many many words decimation has a historic meaning and a modern meaning and the modern meaning has been in use for quite a long time. Some dictionaries use the term 'obsolete' to define the ancient usage.
http://oxforddictionaries.com/definition/english/decimate
http://dictionary.cambridge.org/dictionary/british/decimate
http://dictionary.reference.com/browse/decimate
http://vocabulary-vocabulary.com/dictionary/decimate.php
http://www.collinsdictionary.com/dictionary/english/decimate
http://www.thefreedictionary.com/decimated
http://en.wiktionary.org/wiki/decimate
http://www.vocabulary.com/dictionary/decimate
http://www.macmillandictionary.com/dictionary/british/decimate
In fairness Websters still lists the historic / obsolete definition above the more recent usage.... so maybe I will start going back to telling people they're using it wrong after all.
http://www.merriam-webster.com/dictionary/decimate
My terrible sporting example is unfortunately a typical example of the modern 'correct' usage of the word. I'd be much happier if we kept 'decimation' to the historic meaning which means to punish by killing one on ten.
So you can't decimate financial figures... but you could decimate political figures for messing up the countries financial figures.
Their push for am3 board & ddr3 offered noticeable smoother performance all round when compared to my friend's older intel cpus at that time and felt proud for a moment or two until all my pc gaming chums went to i7 chips! Since then its hardly been that tempting to continue with amd when scanning through the benchmarks on this site and others - was so disappointed when I read the first bulldozer reviews so lets agree the proof is in the pudding and 2009 was a ways back so come on amd show me the pc gamer chip 2013!
Wow. Just... Wow.
(That's not in awe, by the way.)
All you language snobs need to realise language is in constant evolution with dictionaries logging new words and changed meaning after they have gained popular usage.
The only saving grace is that SSD's still arn't standard kit in your average dell/lenovo/acer PC.
http://xkcd.com/386/
The EU is killing the graphics market with their changes.. AMD could suffer much worse in the future because of new legislation.
LOL!! That's awesome...I love it!
AMD can compete at the low end against Atom, but after that it's no contest. Lets be honest here. For those that integrated graphics are good enough, the HD3000/4000 graphics are good enough, but with a much faster and more effiecient cpu that is less power hungry and cooler running. AMD has also failed on pricing too, with not enough margin of lower cost compared to intel to sway the buyer in the mid range. In the top range they have already given up even trying to compete against intel at all.
hang on, did I just read that right; the EU have started the ball rolling on legislation to cap GPU performance? It looked to me like "if your GPU is above this bandwidth, you can't sell it" and this limit is only slightly higher than current cards?
yes, you did read that right.
read the linked article i linked to and both intel and nvidia are both cursing as much as AMD is.
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Are those designs not sold for a one off payment meaning AMD doesn't get a continuous revenue stream?
AMD should invest in Intel shares - they'd probably get a higher return that way. :D
ITX motherboard with MSATA = very compact & capable system. 150W is near the peak of what the bricks for pico-PSUs can supply but it is possible.
I thought that was the point of APUs but mainly I see ATX & MATX boards. :(