AMD's profitable streak ends with net loss in Q2

The $43 million loss comes after two quarters of profit, but is far less than the loss of Q2 last year

Advanced Micro Devices on Thursday reported a net loss for the second quarter of fiscal 2010, breaking a streak of two consecutive quarters of profitability.

On a GAAP (generally accepted accounting principles) basis, AMD reported a net loss of US$43 million, or $0.06 per share, for the quarter ended June 26. That was an improvement on the $330 million loss it reported in the second quarter last year.

As part of the results, AMD reported a $120 million equity loss related to its manufacturing spinoff, GlobalFoundries. Excluding that loss and some other items, AMD would have reported a profit on a non-GAAP basis of $83 million.

The chip designer reported revenue of $1.65 billion, up from $1.18 billion a year earlier. Analysts polled by Thomson Reuters had expected revenue of $1.55 billion.

There was "robust demand" for mobile products, said Dirk Meyer, AMD's CEO, in a statement. The company added Sony as a customer for its microprocessors, and other customers expanded their lineups of PCs with AMD processors.

However, AMD may have lost some share to Intel in the market for server processors, Meyer said on a conference call to discuss the results. Server makers were slow to release new systems with AMD's latest Opteron chips, he said. AMD launched a family of server chips in March code-named Magny-Cours, which include up to 12 cores.

The slow server ramp hurt AMD's competitiveness with Intel, which launched new Xeon server processors with up to eight cores at around the same time that Magny-Cours appeared.

Revenue for the Computing Solutions group, which includes microprocessors, chipsets and embedded processors, was $1.2 billion, up from $926 million in the year-ago quarter.

Graphics chip revenue increased 87 percent year over year to $440 million. The growth was driven by "record" graphics processing unit shipments, the company said. AMD hopes to see its chip shipments grow in the coming quarters as demand for consumer PCs picks up, said Thomas Seifert, AMD's chief financial officer.

The company plans to introduce the next generation of DirectX 11 graphics cards later this year, Meyer said.

AMD said PC makers such as Hewlett-Packard, Acer and Lenovo incorporated a larger mix of AMD chips into their laptops and desktops during the quarter. It also announced new chips during the quarter, including its first triple-core and quad-core laptop processors, part of a new Phenom II line. The company also announced new low-voltage Athlon II Neo and Turion II Neo processors for ultrathin laptops.

AMD also introduced low-priced chips to help it gain share from Intel in the server space. They include a new family of Opteron 4100 microprocessors for cloud computing servers, which include a chip priced at $99.

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Tags business issuesfinancial resultsAdvanced Micro Devices

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Agam Shah

IDG News Service
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