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.
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