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AMD, Intel report second quarter earnings

AMD, Intel report second quarter earnings

AMD CFO, Robert J. Rivet admitted that “while we made solid progress in the second quarter across a number of fronts, we must improve our financial results.”

Over the past couple of days, both AMD and Intel have reported their respective second quarter earnings and there is some interesting reading.

First to announce was Intel, which turned over a massive $8.7 billion USD – this was up eight percent compared to the same period last year, but it was down by two percent compared to the first quarter of 2007.

The company’s operating income came in at $1.35 billion USD and net income of $1.3 billion USD from the last quarter – these figures are up 26 percent and 44 percent respectively on Q2 2006, but down 19 percent and 22 percent on Q1 2007’s performance.

In terms of gross margins, Intel reported a 46.9 percent gross margin, which is lower than expected but largely down to the higher unit shipments and which consequently resulted in a lower average selling price.

Intel’s President and CEO, Paul Otellini, said “Intel's operational execution continued to strengthen, resulting in an outstanding product roadmap and solid year-over-year revenue growth. We're pleased that our efforts to streamline the company are delivering profit growth in excess of revenue growth.”

On the other hand, AMD turned over $1.38 billion USD – an increase of 13 percent compared to the same quarter last year and it was also 12 percent higher than the company’s first quarter revenue.

Again, AMD made an operating loss of $457 million USD and a net loss of $600 million USD. In the same quarter last year, AMD made an operating profit of $102 million USD and a net profit of $88 million USD.

Interestingly, AMD’s gross margins for the quarter were impacted by “a write-off of older microprocessor inventory of approximately $30 million.”

Robert J. Rivet, AMD’s Chief Financial Officer admitted that “while we made solid progress in the second quarter across a number of fronts, we must improve our financial results.” He later added that AMD is continue to focus on realigning its business model and reducing its capital expenditures and cost structure in the second half of the year.

At the moment, things look fairly doom and gloom for AMD and from everything we’ve heard, things aren’t really going to change until the fourth quarter when the company’s next-generation Barcelona processors will have been in the market for some time. On the desktop front though, Phenom won’t ship until sometime in Q4, although AMD is planning to launch the processor in late September – right at the end of the third quarter.

Share your thoughts on the figures in the forums.

8 Comments

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DougEdey 20th July 2007, 12:51 Quote
So the $30million writeoff is why the 939 prices plummeted to £15 new for a single core.
fwalm 20th July 2007, 13:41 Quote
how can they keep going if there losing this much money and the fact intel is going to destroy them on the 22nd July really with the price reductions and a quad for 160. Plus the fact there new processors wont be out for another few months aint looking bright for them even though i like them
Krikkit 20th July 2007, 13:46 Quote
Don't be so quick to judge that AMD's going down - large firms have masses of equity to chew through if they're in big trouble - don't forget they could sell ATi if it really came to it, netting a comfortable few billion dollars.
The performance of their next chip, and its successes as far as marketing and pricing goes, is vital for them, if they get it wrong they could be in real trouble, get it right and they could be in for another Athlon XP/A64 roll, ditching Intel and leaving them behind.
Da Dego 20th July 2007, 13:56 Quote
Quote:
Originally Posted by fwalm
how can they keep going if there losing this much money and the fact intel is going to destroy them on the 22nd July really with the price reductions and a quad for 160. Plus the fact there new processors wont be out for another few months aint looking bright for them even though i like them

Now now, let's not be doomsayers just yet. AMD is well known for having a trick or two up its sleeve. I would not be at all surprised to find Phenom to be a great chip. Also, unlike Intel, many people use Opterons in daily use, so Barcelona isn't really 'months away'. Something about AMD's server designs make for an all-around great chip, and I would bet quite a few of our own enthusiasts have their eyes on 'em.
DXR_13KE 20th July 2007, 14:06 Quote
lets see if they don't pull another X2900, cpu style.
fwalm 20th July 2007, 14:49 Quote
i agree i hope they stay i do prefer them but 400 million a qaurter is a alot for anyone plus witht the quad core going for so low im going to buy it and if amd can do what they did before im going for them again
Flibblebot 20th July 2007, 15:13 Quote
I'm sure a large part of AMD's loss is due to integration issues with ATi - even now, there'll still be redundancy costs, fixed asset write-offs and the like. If AMD are still making a loss in a year, then I'd start to worry.

btw fwalm: we like to use punctuation here. It makes your posts easier to read :p
Techno-Dann 20th July 2007, 15:15 Quote
AMD is going to come back. It's as simple as that. They took four years from the launch of the Athlon to the Athlon 64, which proceeded to pound the Pentium 4s into the dust. It's been another four years, and in that time all they've released to the public is a simple DDR2 memory controller upgrade to the A64. They've been cooking Barcelona/Phenom for a long time, and if past performance is anything to judge by (The original Athlon took Pentium 3s to the cleaner's, A64 pounded P4s), Barcelona and Phenom are going to clean house. Again.

At least, they'd better. The only reason I went AM2 with my new system is the drop-in upgrade to a AM2+ Phenom.
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