Published in News

AMD loses more money

by on22 July 2009

Image

That is 11 quarters without a profit


Chipmaker AMD
reported its 11th consecutive losing quarter, prompting some analysts to wonder if the outfit will ever emerge from the red.

True the $335 million loss AMD reported for the three months that ended June 27 was an improvement on the $414 million the company lost during the first quarter and significantly better than the nearly $1.2 billion it lost in the second quarter last year. Its revenue of $1.18 billion, relatively unchanged from the first three months of the year.

CEO Dirk Meyer said that AMD in recent months has made a big effort to cut costs in response to the worldwide recession, while introducing a host of new products. He said AMD's graphics-oriented chips are attracting new customers. He also noted that government authorities are beginning to act on AMD's long-standing claim that its main competitor, Santa Clara-based Intel, has monopolized the microprocessor market. Meyer admitted that AMD's margins were "disappointing." The company's gross margin for the second quarter was 37 percent, compared with 43 percent for the first quarter.

AMD announced in October a multibillion-dollar infusion from Abu Dhabi investors, which involved spinning off its manufacturing operations into a separate business. But it is heavily in debt from its $5.6 billion purchase of graphics-chip maker ATI Technologies in 2006. And like many other semiconductor companies, AMD has been hurt by weakened consumer demand for personal computers and other products containing its chips.

AMD aslo turned over its chip business for handheld gadgets to Qualcomm for $65 million and sold its digital-TV chip business to Broadcom for about $193 million. Analysts think that AMD will turn to profit next year. However this seems to be a gut feeling rather than anything based on actual facts.
Last modified on 22 July 2009
Rate this item
(0 votes)