AMD Stays Afloat, Revenues Down

Advanced Micro Designs (NYSE:AMD) reported 2nd quarter earnings on Thursday and the results were in line with the lowered guidance they announced to the market last week.  Top line revenue was down from $1.57 billion in Q2 of 2011 to $1.41 billion.  Net income was $0.05 per share on profit of just $61 million.  That puts their net operating margin at just 4.3%.  But, given all of the doom and gloom surrounding the stock and the company they are still operationally profitable, if only barely.  Now that the charges due to their breakup with Global Foundries are behind them their forward earnings are no unencumbered.

Roll out of their Trinity APU’s has been spotty with the mobile chips making their way into a handful of new notebooks by Lenovo, H-P (NYSE:HPQ) and Samsung.  Trinity does offer a unique value proposition in the market place combining the best mobile graphics performance with mid-level CPU performance.  For the budget gamer on the run, read over-indebted college student, Trinity-powered laptops are a suitable all around machine for considerably less than an Intel powered Ivy Bridge Ultrabook.

For AMD the problem currently is the delays in getting the desktop versions of Trinity into the hands of gamers looking for budget gaming boxes with a dual-GPU setup.  They’ve been delayed until October which also puts AMD behind schedule to get solid design wins in the next round of Windows 8 ready Touchscreen All-in-One PCs that the ODMs are taking increased orders for right now.  They will have to be powered by the mobile versions of the chips as opposed to the higher clock speed desktop variants.


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Tom Luongo

About Tom Luongo

Tom Luongo is a professional chemist and self-taught economist who has been following and trading stocks for nearly 12 years. He has no formal ties to the financial industry and considers that an asset in his analysis of the interplay between monetary policy and capital markets.

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