Sunnyvale (CA) - Declining microprocessor sales as well as dropping average selling prices for its microprocessors have pushed AMD deeper into the red. The company reported a net loss of $611 million on revenues of $1.233 billion, which is more than 20% below the guidance the company expected at the end of Q4 2006.
The loss includes charges related to the ATI acquisition in the amount of $113 million, but is mainly a result of the increasing competition with Intel in the microprocessor market. The company said that its Q1 margins were 31%, down from 40% in Q4 2006 and down from 59% in Q1 2006. "The decrease from the prior quarter was largely due to significantly lower microprocessor unit shipments, lower microprocessor average selling prices (ASPs), and the inclusion of the former ATI operations, which generally have lower-margin products, for the entire quarter, AMD said.
AMD had revenues of $1.332 billion and a profit of $259 million in Q1 of 2006; in Q4 2006, the company reported revenues of $1.773 billion and an operating loss of $529 million.
"After more than three years of successfully executing our customer expansion strategy and significantly growing our unit and revenue base, our first quarter performance is disappointing and unacceptable," said Robert J. Rivet, AMD's chief financial officer, in a prepared statement. "We are aggressively addressing the issues that led to our significant revenue decline. We are aligning our business model, capital expenditures and cost structure with the goal of accelerating our return to profitability."
In a press release, AMD said that computing solutions group sales were $918 million, down 38% sequentially. "Year-over-year server and desktop processor unit shipments and revenues declined significantly, while mobile processor unit shipments and revenue increased significantly," the firm said.
Last week, AMD warned the financial community that the company would report significantly lower revenues. The company also announced that it plans to restructure its business model to increase operational efficiencies and lower its operating cost structure.
AMD's stock dropped about 2% in after hour trading late Thursday.
fonte: Tom's Hardware
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Intel extends market share gains
Intel once again increased its lead over arch-rival AMD during Q1, as its share of world x86 chip sales rose above 80 per cent - the first quarter it's done so since Q3 2005.
The figures come from market watcher iSuppli, which put Intel on 80.2 per cent and AMD on 11.1 per cent. AMD's share fell from 15.7 per cent in the previous quarter, when Intel commanded 75.7 per cent of the market.
The x86 business is a classic two-horse race: when Intel falls, AMD rises - and vice versa. The two companies' marketshares remained largely static throughout 2004 and the first half of 2005, but during Q3 and Q4 of that year AMD began to erode Intel's lead. AMD's marketshare rose to a maximum of 16.7 per cent - Intel was on 73.2 per cent - in Q3 2006.
Since then, the tables have turned and Intel has been winning lost share back from AMD, quarter after quarter, iSuppli's numbers show.
Q2's numbers seem unlikely to show any change to that trend, given the boost Intel will have taken from this week's Developer Forum announcements and, more importantly, next month's next-gen Centrino launch.
But AMD is expected to revamp its desktop and server processor lines in Q3, a move that may flip the balance.
fonte: RegHardware
