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AMD is "Transforming", Says CEO Rory Reed

By - Source: Computerworld | B 53 comments

On Thursday in a conference call after AMD's second quarter 2013 financial results, company president and CEO Rory Read said that the company has entered phase two of its "restructure, accelerate, and ultimately transform" realignment project. With the restructuring complete, the company will now focus on continuing to accelerate its business in the second half of the year. Profitability is expected to return in the third quarter based on the mid-point of AMD's revenue guidance.

For the second quarter, AMD reported an operating loss of $29 million, a net loss of $74 million, and a loss per share of $0.10. The company also reported a non-GAAP operating loss of $20 million, a net loss of $65 million, and loss per share of $0.09. AMD's revenue was $1.16 billion, an increase of 7 percent sequentially and a decrease of 18 percent year-over-year.

Last quarter was actually rather rough for AMD. The company reported an operating loss of $98 million, a net loss of $146 million and a loss per share of $0.19. The company also reported a non-GAAP operating loss of $46 million, a net loss of $94 million and a loss per share of $0.13. Total revenue for that quarter was $1.09 billion.

"Our focus on restructuring and transforming AMD resulted in improved financial results," Read said. "Our performance in the second quarter was driven by opportunities in our new high-growth and traditional PC businesses. Looking ahead, we will continue to deliver a strong value proposition to our established customers and also reach new customers as we diversify our business. We expect significant revenue growth and a return to profitability in the third quarter."

AMD said that for 3Q 2103, it expects to see revenue to increase 22 percent, plus or minus 3 percent, sequentially. That's likely because the company's APU will be appearing in the Xbox One and PlayStation 4 this fall, and it already has a chip in Nintendo's struggling Wii U. The revenue increase will also stem from additional form factors as the company tries to offset slowing sales in the desktop market, and from cost-cutting measures.

Some of those cost-cutting measures have included selling off a campus in Austin, Texas, and laying off 15 percent of its workforce back in October 2012. The company also severed its relationship with Globalfoundries (which resulted in a penalty), and launched a new custom-chip business for gaming consoles, embedded devices and other non-desktop devices. This chip business is expected to account for 20 percent of revenue by the fourth fiscal quarter.

"They've made a lot of progress," said Nathan Brookwood, principal analyst at Insight 64. "In particular, they are not trying to play a game against Intel, which is 10 times their size. That's a pretty good sign."

Brookwood believes that AMD could ultimately make an impact in tablets which currently relies on Temash, AMD's tablet APU for Windows 8. The company indicated it will also build chips for Android tablets and Chrome OS devices, but doesn't have any interest in smartphones. Consoles, however, will likely be the key in driving AMD's return to profitability in 3Q 2013.

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Top Comments
  • 27 Hide
    m32 , July 20, 2013 1:12 PM
    Quote:
    I just don't see AMD being competitive ever again in the high end CPU or GPU market. They should just stick to what works the lower end to middle class CPU/PPU and lower to mid level GPUs where they can hang with Intel and Nvidia and most times give better value with close performance.



    Outside the Titan and Titan LE (780), how AMD can't compete in the high end GPU market? I'm sure the 7970 GE is very competitive against any Nvidia GPU outside of those two.

  • 26 Hide
    slomo4sho , July 20, 2013 12:04 PM
    Lets see if Steamroller can deliver!
  • 20 Hide
    halcyon , July 20, 2013 1:22 PM
    AMD offers a good budget-oriented product. While their CPUs can't compete with Intel on the performance side they're more than fast enough for most home users (me included). I keep saying I'm gonna upgrade my ancient 965BE...but it keeps being fast enough. Durn it.
Other Comments
    Display all 53 comments.
  • 26 Hide
    slomo4sho , July 20, 2013 12:04 PM
    Lets see if Steamroller can deliver!
  • 11 Hide
    SkateZilla , July 20, 2013 12:05 PM
    it's 2103 already?
  • -7 Hide
    17seconds , July 20, 2013 12:43 PM
    Well that ought to make the investors feel better about losing their money.
  • 27 Hide
    m32 , July 20, 2013 1:12 PM
    Quote:
    I just don't see AMD being competitive ever again in the high end CPU or GPU market. They should just stick to what works the lower end to middle class CPU/PPU and lower to mid level GPUs where they can hang with Intel and Nvidia and most times give better value with close performance.



    Outside the Titan and Titan LE (780), how AMD can't compete in the high end GPU market? I'm sure the 7970 GE is very competitive against any Nvidia GPU outside of those two.

  • 5 Hide
    Anonymous , July 20, 2013 1:15 PM
    Im glad AMD can plan well ahead into the future ;D
  • 9 Hide
    10tacle , July 20, 2013 1:17 PM
    About time. I'm strictly an Intel builder, but the day AMD doesn't offer strong competition is the day we all lose. Good luck AMD...motivate me to switch to your side.
  • 20 Hide
    halcyon , July 20, 2013 1:22 PM
    AMD offers a good budget-oriented product. While their CPUs can't compete with Intel on the performance side they're more than fast enough for most home users (me included). I keep saying I'm gonna upgrade my ancient 965BE...but it keeps being fast enough. Durn it.
  • 4 Hide
    Yuka , July 20, 2013 1:56 PM
    Now they just have to roll out some products...

    Heh...

    Cheers! :p 
  • 1 Hide
    blubbey , July 20, 2013 2:01 PM
    I hope VI will deliver.
  • 1 Hide
    kirilmatt , July 20, 2013 2:10 PM
    I can certainly believe profitability for Q3. It seems like AMD's future is very bright. Hopefully kaveri delivers and so does steamroller. aMD's execution has been quite strong recently. I'm also anticipating volcanic islands GPUs.
  • 0 Hide
    guru_urug , July 20, 2013 2:20 PM
    AMD evolves...
    AMD uses steamroller and VI
    Its super-effective :-)
    gaming evolved
  • 3 Hide
    JPNpower , July 20, 2013 3:07 PM
    In chip manufacture, where ideas shine brighter than sheer large scale funding, AMD could rebound. The future seems bright. (This coming from a Intel/Nvidia fan.)
  • 3 Hide
    teh_chem , July 20, 2013 3:08 PM
    Quote:
    I just don't see AMD being competitive ever again in the high end CPU or GPU market. They should just stick to what works the lower end to middle class CPU/PPU and lower to mid level GPUs where they can hang with Intel and Nvidia and most times give better value with close performance.


    The high-end market is a fraction of a fraction of a percent of AMD's (or Intel's, for that matter) market and revenue. General users now mainly suffer on a performance end from the software being used, rather than what the hardware is capable of; most CPU's, high-end or otherwise, are so much more powerful than needed, so there isn't much of a push to make the best and fastest thing anymore, especially if it takes a lot of internal R&D to generate products that most people really can't use to any noticeable improvement over previous or alternative hardware in the mainstream.

    This coupled with AMD's shift to server-end markets (with the acquisition of SeaMicro) indicates their mentioned company restructuring. What I am curious about is how (or if) they plan to address the small device mobile industry, where Nvidia and Qualcomm seem to have giant's shares of the market, and is a booming market at the moment.
  • 12 Hide
    Cryio , July 20, 2013 3:32 PM
    If Steamroller can continue the +15% improvement, then the competition will really tighten seing how Haswell is barely 5% faster than 2 generations old Sandy Bridge.

    New APUs will rule the world, if the same 15% applies there (hopefully with new GPUs)

    In the fall the money will start flowing with the sell of the next-gen consoles.

    Once HD9000 launches, expect AMD to rule over Nvidia easily.

    As far as I'm concerned, AMD is pretty much set.
  • 3 Hide
    Maxx_Power , July 20, 2013 3:37 PM
    AMD-bots! Transform!
  • 0 Hide
    Maxx_Power , July 20, 2013 3:38 PM
    AMD has been transforming into a lot of Constructicons lately. Steamroller is another piece to make 1 complete Devastator!
  • 7 Hide
    9a3iqa , July 20, 2013 3:38 PM
    Quote:
    I just don't see AMD being competitive ever again in the high end CPU or GPU market. They should just stick to what works the lower end to middle class CPU/PPU and lower to mid level GPUs where they can hang with Intel and Nvidia and most times give better value with close performance.


    They could definitely catch up on the CPU since Intel is progressing very slowly on that side (Ivybridge to Haswell was a minor improvement and it was supposed to be a "tock"), especially since Steamroller looks very promising.

    On the GPU side they are already competitive, comparing the 7970 and the GTX 680 (both from the same generation) the 7970 is the faster (slightly) GPU. It's not fair to compare it to the 780 because that is Nvidia's new generation. Let's wait for the 9970 (next AMD flagship) before we jump to conclusions.
  • 9 Hide
    Thanatos Telos , July 20, 2013 3:44 PM
    Quote:
    I just don't see AMD being competitive ever again in the high end CPU or GPU market. They should just stick to what works the lower end to middle class CPU/PPU and lower to mid level GPUs where they can hang with Intel and Nvidia and most times give better value with close performance.


    People said the same thing about Intel before the Core 2 series was released.
  • -8 Hide
    iam2thecrowe , July 20, 2013 3:54 PM
    how can they still be in business losing that much money? they really need the sales of their products in the ps4 and xbox to make a decent profit. I know for a fact they aren't making minimal profit, if any, on their desktop cpu's to keep their prices competitive.
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