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AMD reports Q3 results

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October 18, 2006 9:21:52 PM

Quote:

EPS of $0.27 Driven by 18 Percent Quarter-over-Quarter Increase in Microprocessor Unit Shipments and Record Sales of Mobile Processors


SUNNYVALE, Calif.--(BUSINESS WIRE)--AMD (NYSE:AMD - News) today reported sales of $1.33 billion, operating income of $119 million, and net income of $134 million, or $0.27 per share, for the quarter ended October 1, 2006. These results include $16.5 million of employee stock-based compensation expense.
In the third quarter of 2005, excluding the Memory Products segment(1), AMD reported sales of $1.01 billion and operating income of $129 million. In the second quarter of 2006, AMD reported sales of $1.22 billion and operating income of $102 million.


As I suspected sales are up and ASP is upn. $.27 is not too bad in the midst of a price war with a big bully.
I think the 4th quarter will be even better if they can get good volume on 65nm. I guess they won't be going BK either.

ALL HAIL THE DUOPOLY!!!!

More about : amd reports results

October 18, 2006 10:00:14 PM

I'm going to, because without it, we'd all be using netburst chips.
October 18, 2006 10:05:42 PM

Right, no BK, it seems that they are on track with their plans. So, let us all wait for next month when they introduce the 4X4 platform and see how that goes.
Related resources
October 18, 2006 10:23:11 PM

To see if these price slashing wars of the past few months, you will have to wait another few months still, to see how the effects hit thier bottom line...
October 18, 2006 10:37:47 PM

Wow, look at the after hours trade:




Listening to AMD's conference call, the investor's sure hate this price war...
October 18, 2006 10:40:58 PM

Bah... beat me by 2 min.
October 18, 2006 10:41:36 PM

Funny you should mention the duopoly...I just had a Managerial Economics exam this afternoon that dealt with duopolies and cournot situations...in fact, this whole Intel vs. AMD thing is my term paper for my Organizational Behavior class... :) 

I'm looking forward to seeing how the switch to a 65-nm process and larger wafers will translate to their costs/earnings for the next couple quarters.
October 18, 2006 10:43:01 PM

"Gross margin fell to 51.4 percent, from 56.8 percent the previous quarter."
Wow, 10% difference..
October 18, 2006 10:46:41 PM

Quote:
Bah... beat me by 2 min.


:lol: 
Well, at least AMD is only down 12.05% right now.

If anyone wants to hear the conference call, they will be streaming it through Friday here:
http://biz.yahoo.com/cc/9/73739.html
October 18, 2006 10:50:05 PM

Which more or less equals the amount that Intel lost when you think about it.
October 18, 2006 10:58:45 PM

I'm not that worried about the future. The fact that they were able to ship more processors despite the price cuts, and consequently increase their revenue is a good sign. The decrease in stock value because of the profit loss is understandable, and once this "new equlibrium" for the market sets in, it should rise again.

Interestingly enough, it's being said that Intel is no longer a good indicator of how the tech sector is doing (which they used to be)...basically because they're in this price war with AMD.

But hey...as long as I get my cheap-ass, kick-ass procesor, I'm happy either way.
October 18, 2006 10:59:10 PM

A bit below 27 cents actually. 4 cents of that was a one time tax benefit

Well see how it opens tomorrow, after hours is whacky, I've seen stocks up 10-15% after hours and open up down the next morning (based on previous days normal hours trading price) with nothing new since the after hours trading, limited trading throws things off.

I am interested in seeing someone put up some commentarty on what was said about expected sales in 2007 rather than this last quarter, if they ahve much up their sleave they won't push ASP's and profits down too much in their forecast.
October 18, 2006 11:10:56 PM

Quote:
Which more or less equals the amount that Intel lost when you think about it.

Yeah, but I think AMD price will rebound a bit. Some are bound to see it as undervalued and start buying at this low price.

What troubles me is the Q & A session at the end of the conference call. You can tell by the questions, and the tone they're asked in, that investment firms aren't impressed with AMD's performance last quarter:
While mobile sales were up strongly, desktop market was hit by Conroe and the price war. On the server end, AMD was rather vague in answering if they lost any market share, or what their plan is in this sector for the next quarter.

While I'm not predicting gloom or doom for AMD, they have a lot on their plate right now. I'm sure they have a plan, but apparently they are unable (or maybe unwilling) to articulate it.
October 18, 2006 11:14:52 PM

I'm leaning to unwilling. AMD has been holding there cards pretty close when you look at the past month.
October 18, 2006 11:27:22 PM

Quote:
I'm leaning to unwilling. AMD has been holding there cards pretty close when you look at the past month.


I hope you're right, but unfortunately, I'm leaning towards unable.

If they're holding any cards, now is the time to play them. They need to counter the momentum Intel is gaining. 4x4, by AMD's own admission, is not going to be geared for the mainstream. Barcelona is still a long ways off. They are going to lose 60% capacity in one of their fabs until 2008, as they retool to 300mm/65nm, and their roadmaps show no great performance benefit at 65nm uarch.

With the Xmas season (huge selling time) and Vista coming in January, AMD should be announcing new product to stir interest and create demand. If they do have anything up their sleeve, now is the time to show it.
October 18, 2006 11:35:47 PM

Quote:
Wow, look at the after hours trade:




Listening to AMD's conference call, the investor's sure hate this price war...


ya looks like they are jumping ship before the big intel iceberg hits it and titanics them


It's funny you said that considering that the nickname for Itanium is Itanic cause it sank real well.
October 18, 2006 11:39:37 PM

Quote:
when does the 5 billion ati show up on amd's books?
is that a 5 billion dollar operations expense?


Congrats on your 666 post! :twisted:

I'm not sure. It just passed the final shareholder approval, so I'm wondering if it will be Q1-07 or next quarter. All the info today keeps mentioning that the numbers do not include ATI.
October 18, 2006 11:46:41 PM

Quote:
I'm leaning to unwilling. AMD has been holding there cards pretty close when you look at the past month.


I hope you're right, but unfortunately, I'm leaning towards unable.

If they're holding any cards, now is the time to play them. They need to counter the momentum Intel is gaining. 4x4, by AMD's own admission, is not going to be geared for the mainstream. Barcelona is still a long ways off. They are going to lose 60% capacity in one of their fabs until 2008, as they retool to 300mm/65nm, and their roadmaps show no great performance benefit at 65nm uarch.

With the Xmas season (huge selling time) and Vista coming in January, AMD should be announcing new product to stir interest and create demand. If they do have anything up their sleeve, now is the time to show it.


I disagree. I think it's better for them to have a tried and true architecture that provides better perf than MOST of Intel's current inventory.

The Fab 38 retool should go well since Fab 36 should be at 100% by the time they start. CHartered has already qualified their 65nm and AMD has promised a quick ramp. They also have the option of increasing to 3000WSPM from them.

4x4 was designed to be the next step for FX and I think that they will make a splash if system prices come in under or close to $2000.

Intel can't have momentum as the leader. They can only try to "stem the tide."

ALL HAIL THE DUOPOLY!!
October 18, 2006 11:48:33 PM

Do you think that's enough reason to develop a fear of clowns?
October 18, 2006 11:51:17 PM

Quote:
Do you think that's enough reason to develop a fear of clowns?


I personally like the clown, but then again I am not really afraid of too many things.
October 18, 2006 11:51:46 PM

Quote:
Intel can't have momentum as the leader. They can only try to "stem the tide."


FUD PotD! :p 
October 18, 2006 11:54:38 PM

Quote:
your clown avatar isnt funny In fact, its kind of scary. I've wondered where this started and I think it goes back to the time I went to the circus, and a clown killed my dad.


That was a kick ass movie.

"Killer Clowns From Outer Space." No pun intended and sorry for your loss.
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October 18, 2006 11:58:57 PM

Quote:

EPS of $0.27 Driven by 18 Percent Quarter-over-Quarter Increase in Microprocessor Unit Shipments and Record Sales of Mobile Processors


SUNNYVALE, Calif.--(BUSINESS WIRE)--AMD (NYSE:AMD - News) today reported sales of $1.33 billion, operating income of $119 million, and net income of $134 million, or $0.27 per share, for the quarter ended October 1, 2006. These results include $16.5 million of employee stock-based compensation expense.
In the third quarter of 2005, excluding the Memory Products segment(1), AMD reported sales of $1.01 billion and operating income of $129 million. In the second quarter of 2006, AMD reported sales of $1.22 billion and operating income of $102 million.


As I suspected sales are up and ASP is upn. $.27 is not too bad in the midst of a price war with a big bully.
I think the 4th quarter will be even better if they can get good volume on 65nm. I guess they won't be going BK either.

ALL HAIL THE DUOPOLY!!!!
Quote:
Considering the dramatic price decreases of its desktop processors over the past three months, AMD delivered a solid third quarter result. Sales increased almost 32% from $1.01 billion to $1.33 billion year-over-year. Operating income retreated from 129 million to $119 million in the same time frame.


This is what will hurt AMD big time starting next quarter. As I stated in my other post they will be selling more processors (thanks to Dell) but making less profits. This is a direct consequence of Intel's strategy with Core 2 Duo pricing.

It is an advantage of Intels (due to the manufacturing cost superiority of 65nm vs 90nm and soon 45nm vs 65nm).

Looks like things are going exactly the way Wusy predicted.
October 19, 2006 12:04:02 AM

Quote:
I disagree. I think it's better for them to have a tried and true architecture that provides better perf than MOST of Intel's current inventory.

With Intel discontiuning and "firesaling" the Netburst line in January, C2D will be it's only desktop line.

Quote:
The Fab 38 retool should go well since Fab 36 should be at 100% by the time they start. CHartered has already qualified their 65nm and AMD has promised a quick ramp. They also have the option of increasing to 3000WSPM from them.

But, with limited supply and outright shortages occuring now, AMD can't afford even a slight mis-step. 2008 looks like it's going to be productive for AMD, but I question their ability to meet demand in the short term.

Quote:
4x4 was designed to be the next step for FX and I think that they will make a splash if system prices come in under or close to $2000.

If it lives up to expectations, the 4x4 will be a good enthusiast product. It won't (and is not intended to) be mainstream, however.

Quote:
Intel can't have momentum as the leader. They can only try to "stem the tide."

ALL HAIL THE DUOPOLY!!

As far as the stock market goes, sometimes momentum (and hype) is more important than the P&L, take the dot com boom in the nineties for example.
October 19, 2006 12:09:50 AM

Quote:

It was a decent quarter for AMD, but investors were very unhappy.

This was a belly laugh to see this thread and look at after hours.


I do, however, think this is an omen to move the rest of my 401K out of the tech stocks. :cry: 
October 19, 2006 12:13:02 AM

Quote:
This is what will hurt AMD big time starting next quarter. As I stated in my other post they will be selling more processors (thanks to Dell) but making less profits. This is a direct consequence of Intel's strategy with Core 2 Duo pricing.

It is an advantage of Intels (due to the manufacturing cost superiority of 65nm vs 90nm and soon 45nm vs 65nm).

Looks like things are going exactly the way Wusy predicted.



What you have to look at is the growth BEFORE Dell. Q1\Q2 was amazing for AMD even with the price war and slow Q2 sales. Opteron made a place for AMD and they will continue to gain share.

If they are stockpiling 65nm chips now, they can possibly release 1 million in Dec. That should cover Dell for a few months combined with 939 and 754 and allow small companies to get their fill.
October 19, 2006 12:16:46 AM

Quote:
Do you think that's enough reason to develop a fear of clowns?


I personally like the clown, but then again I am not really afraid of too many things.

I too, have conquered fear. Now I'm working on uncertainty and doubt. At least I think I am, but I'm not quite sure about the latter. :?


P.S. I hope beerandcandy was joking. 8O
October 19, 2006 12:18:57 AM

Yet the investor still weren't impressed. Why are they so fickle?
October 19, 2006 12:22:16 AM

Quote:
Yep --- the good old days of 12-20% growth are gone, and AMD and Intel appear to be in a race to see who can commoditize (new word, lack of better one :)  ) the fastest :) 


:trophy:
Looks like we got our Sniglet of the day. :p 
October 19, 2006 12:28:29 AM

:idea: :!:
This just makes me want to make a TGFz dictionary...
a b à CPUs
October 19, 2006 12:31:02 AM

Quote:
This is what will hurt AMD big time starting next quarter. As I stated in my other post they will be selling more processors (thanks to Dell) but making less profits. This is a direct consequence of Intel's strategy with Core 2 Duo pricing.

It is an advantage of Intels (due to the manufacturing cost superiority of 65nm vs 90nm and soon 45nm vs 65nm).

Looks like things are going exactly the way Wusy predicted.



What you have to look at is the growth BEFORE Dell. Q1\Q2 was amazing for AMD even with the price war and slow Q2 sales. Opteron made a place for AMD and they will continue to gain share.

If they are stockpiling 65nm chips now, they can possibly release 1 million in Dec. That should cover Dell for a few months combined with 939 and 754 and allow small companies to get their fill.

To be quite honest AMD have had no real competition in all areas save mobile solutions for 3 years (performance, performance/watt, price/performance and performance/clk). Therefore growth is to be expected no? (seeing as AMD's processors were priced accordingly).

Intel comes out with Core 2 Duo, they too capture all the markets.. but what they do is different. They release Core 2 Duo at insanely low prices (comparatively speaking) forcing AMD to pretty much bottom out their prices. You'll start to see the effect of this strategy come next quarter.

AMD still needs to ramp up 65nm production, and just when they will have it producing in volumes, Intel will be ready to drop another bomb... 45nm.

In other words expect AMD sales to increase but profits to dwindle for a while. Intel is using it's might and being overly aggressive. This is forcing prices to drop from both competitors.
October 19, 2006 12:35:14 AM

...And the conclusion of the matter, having review all these talking points are that we will have and do have ridiculously cheap processors, and the trend will continue for the next eight or so quaters.



I love these price wars... :D 
Now if only there would be a price war between RAM makers. :( 
October 19, 2006 12:39:14 AM

Quote:
:idea: :!:
This just makes me want to make a TGFz dictionary...


Maybe you should post a Technology Sniglet of the Week to go with your Babe of the Week on your Blog.

I wouldn't make a Sticky in the Forumz with it, however. Did you ever notice that the Official CPU Buyer's Guide sticky hasn't been updated since February, and it's locked so that it can't be updated?
http://forumz.tomshardware.com/hardware/THGC-CPU-Buyers-Guide-24-Feb-2006-ftopict59540.html
October 19, 2006 12:53:55 AM

I'm not sure if I can think of the Tech Sniglet of the week, so I'll probably have a contributor post one every week. Up to the job Evil Clown?

BTW it ain't locked, we just can't reply. you know, like a club kinda thing...
October 19, 2006 1:15:44 AM

:twisted:

drAMDatize: To present skewed, biased or opinionated information as solid fact.
October 19, 2006 1:25:13 AM

Added..... now.
a b à CPUs
October 19, 2006 1:38:36 AM

BTW.. to those who don't already know Intel will be lowering price on their Pentium D lineup by up to 17% on October 22, 2006 in order to flush out remaining inventory. These processors are actually selling quite well.

Just an FYI.
October 19, 2006 1:40:48 AM

:lol:  8)

Going for more of a drahm-dah-tize (as in dramatize) pronounciation though.
October 19, 2006 1:58:45 AM

knee jerk response. We'll see what happens tommorrow, but at a completely pulled from my arse guess, Il bet it be mostly stable, very modestly on the gain side.

Anyone care to start a pool? Jack could offer his EE6800 as grand prize.
October 19, 2006 2:35:46 AM

Quote:
when does the 5 billion ati show up on amd's books?
is that a 5 billion dollar operations expense?


It will not show up as an operating expense on the income statement at all. Acquisitions for cash will be reported as a reduction in cash and short-term equivalents of about 2.5 billion. They also incurred 2.5 billion in debt from Morgan Stanley for the rest. That debt will show up probably somewhere in long-term liabilities. The offset will be in the equity column in common stock and additional capital over par. I don't know the particulars of ATI or AMD's composition, but their collective assets would be combined, as well as their collective debts, and also their collective equity. Since AMD is making the purchase with mostly cash, only a small part of ATI equity will be added into AMD's equity column. I think its about 1.12-1.16 billion, depending on the share price. The rest of the purchase will show up as added liability (for the loan) and reduced cash.
None of that will be on the income statement except for acquisition related expenses. Next year, however, interest on the new debt WILL show up in their income statements as an expense. I do not think they will consolidate the business units, they will probably keep the companies' earnings separate for a long while, and it will be interesting to see where that interest expense shows up. It should be under AMD's earnings, but there's nothing to stop them from Enronning the whole thing either, and hiding losses and what-not in their new subsidiary....

That's my two cents, you will be billed for the 80 dollar hourly rate it cost me to type all that at a later date.
October 19, 2006 7:38:43 AM

Quote:
:twisted:

drAMDatize: To present skewed, biased or opinionated information as solid fact.


Exit, now you sound like a



:wink:
October 19, 2006 7:41:40 AM

Quote:
knee jerk response. We'll see what happens tommorrow, but at a completely pulled from my arse guess, Il bet it be mostly stable, very modestly on the gain side.

Anyone care to start a pool? Jack could offer his EE6800 as grand prize.


3 words....

In You're Dreams....

:)  :) 

:roll: Well it was worth a shot......
October 19, 2006 1:17:19 PM

Quote:
To be quite honest AMD have had no real competition in all areas save mobile solutions for 3 years (performance, performance/watt, price/performance and performance/clk). Therefore growth is to be expected no? (seeing as AMD's processors were priced accordingly).

Intel comes out with Core 2 Duo, they too capture all the markets.. but what they do is different. They release Core 2 Duo at insanely low prices (comparatively speaking) forcing AMD to pretty much bottom out their prices. You'll start to see the effect of this strategy come next quarter.

AMD still needs to ramp up 65nm production, and just when they will have it producing in volumes, Intel will be ready to drop another bomb... 45nm.

In other words expect AMD sales to increase but profits to dwindle for a while. Intel is using it's might and being overly aggressive. This is forcing prices to drop from both competitors.


http://www.tgdaily.com/2006/10/18/amd_turion_sales_q3_2...

Quote:
AMD said that shipments and revenues of its mobile Turion 64 processors climbed more than 50% over the previous quarter. "This was more than we anticipated," said Meyer during a conference call.
a b à CPUs
October 19, 2006 2:49:42 PM

Quote:
To be quite honest AMD have had no real competition in all areas save mobile solutions for 3 years (performance, performance/watt, price/performance and performance/clk). Therefore growth is to be expected no? (seeing as AMD's processors were priced accordingly).

Intel comes out with Core 2 Duo, they too capture all the markets.. but what they do is different. They release Core 2 Duo at insanely low prices (comparatively speaking) forcing AMD to pretty much bottom out their prices. You'll start to see the effect of this strategy come next quarter.

AMD still needs to ramp up 65nm production, and just when they will have it producing in volumes, Intel will be ready to drop another bomb... 45nm.

In other words expect AMD sales to increase but profits to dwindle for a while. Intel is using it's might and being overly aggressive. This is forcing prices to drop from both competitors.


http://www.tgdaily.com/2006/10/18/amd_turion_sales_q3_2...

Quote:
AMD said that shipments and revenues of its mobile Turion 64 processors climbed more than 50% over the previous quarter. "This was more than we anticipated," said Meyer during a conference call.


And you're posting this why? It has little to do with my post. I said that AMD have had little competition in all sectors save for the Mobile sector over the past 3 years (not sales competition as Intel's Marketing Dept was quite strong, but competition from a price/performance, performance, performance/watt etc view).

As for the Mobile Sector, Intel also increased shipments of mobile parts, in fact they've been selling their left over PentiumM stock like crazy at ridiculously low prices ($600CDN for 1.7GHz PentiumM laptop?).

But this is due to a price war.. and as such AMD will suffer more then Intel will by waging a price war. AMD does not have the processor making capacity to wage a price war with Intel. As prices tumble, both need to sell more units to make up for the lower selling prices. AMD simply does not have the ability to even meet DELL's demand without falling prey to a shortage. If prices drop dramatically once more, expect AMD to start posting losses and of course Intel profits to drop once more though remaining profitable (as they have the processor making capacity and the edge on units per wafer and cost advantage of a more robust process technology).
Intel processors are also extremely under clocked. One can figure this out on their own by overclocking the bastards. Thus indicating extremely profitable yields even at 2.93GHz and beyond.
October 19, 2006 6:50:03 PM

Quote:
Aside from the fact Hector didn't even come close to answering the question (I have doubts he actually understood the question) AMD really only delivered two new things in the last year, *ehem* thus far ---

a) A new socket with new memory (AM2)
b) A new socket with new memory (1204, Rev F.)

This is stressing their company??? :)  :) 

You are wrong about this Jack!
How can you forget about the hidden feature of all sAM2 CPUs?
The Reverse Hyper Threading!

The inventor of 4x4, allready have proved the existance of RHT in sAM2 K8 Rev. F:
http://forumz.tomshardware.com/hardware/modules.php?name=Forums&file=viewtopic&t=189061&postdays=0&postorder=asc&highlight=reverse+hyper+threading&start=50
Quote:
As I said with AMDs "SUPPOSED" Dynamic Threading prefetch, OoO (mem disambig) and the ike are necessary to enable this tech. As I also mentioned and a post from JJ showed a link which talked about "Optimized Slices." I'm not even sure this would need a "patch" or BIOS support in that it's not an exposed algorithm. It may be that the "exposed" component on the mobo may talk to ACPI to "override" the power savings.


http://forumz.tomshardware.com/hardware/modules.php?name=Forums&file=viewtopic&t=186197&highlight=reverse+hyper+threading
Quote:
After 8+ weeks of thinking about it I finally figured it out. It's actually kinda simple in a complex sort of way. One way is to mark async calls and run them on a second proc (spell check on Proc A, grammar check on Proc B) or to separate class methods and run some methods on Proc A and some on Proc B ( Class A has Method A, Method B Method C, Method D Method E. Method A calls method B, Method C Calls D which calls E.

By running Method A on Proc A, and Method B on Proc B, if they are independent and synchronous, the process will run faster - an example would be a game where physics code can run on one chip, rendering methods go to another, joystick feedback can run on another, internet connection, (all have entry points). SInce every app has a main thread it would be possible to mark methods with Proc Affinity with a low level header. When programs load paths are computed and affinity is assigned to each entry point with independent results. Of course devs would have to do SOME of the work but it's a good tech for improving the "single threaded" code paradigm.


http://forumz.tomshardware.com/hardware/modules.php?name=Forums&file=viewtopic&t=189703&postdays=0&postorder=asc&highlight=reverse+hyper+threading&start=0
Quote:
After reading the latest "unversity research" it will be a boon to any company who uses it.

Assigning for loops would improve game matrix programming in a multithreaded scenario at least 40-50% - especially using optimized time slicing through the partition interface.


Optimization and coordinated scheduling of prefetch (L1-L2, L2-RAM) and the aleady existent (?) parallel decoder/instruction units would allow for multiple instructuion flows in a superscalar fashion.


http://forumz.tomshardware.com/hardware/modules.php?name=Forums&file=viewtopic&postdays=0&postorder=asc&highlight=reverse+hyper+threading&start=25&p=1127371#1127371
Quote:
It's almost like having a BIOS option for instruction set.

There was a rumor that this disables the "dual master" function and allows one chip to run using the full cache and perhaps execution untis for the other chip. This would save power and give intel their "satisfaction/watt."
October 19, 2006 7:13:59 PM

....Wow. That's all I can say. Wow.
October 19, 2006 7:42:58 PM

This is a prime example of....
BaronMatrix Logic®

Mere mortals cower from its sheer massitiviousness and drAMDatization.
October 19, 2006 7:48:32 PM

Quote:
This is a prime example of....
BaronMatrix Logic®

Mere mortals cower from its sheer massitiviousness and drAMDatization.

I think it would be more like this
BaronMatrix nLogic®
I've got it:
BaronMatrix nLogic® Go stupid. Go dumb. Go nLogic®


Alright we should stop. This is just mean.
!