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Friday, 18 July 2014 09:01

AMD reports loss, shares tumble

Written by Nick Farrell

Chipmaker dragged down by debt

AMD’s debt load is causing huge problems for the chipmaker -- this quarter it had another substantial loss. The tame Apple Press has been claiming that AMD’s woes are caused by the fact it did not move to mobile as was directed by the profit Steve Jobs. They claim, along with some of the dafter analysts, that mobile computing has replaced the PC and companies that stuck to the “old technology” suffered.

However that does not explain how Intel made a stonking profit mostly because of its PC chip sales while its mobile division bled cash. The insistence that mobile was a replacement technology, rather than a parallel development which would not have been noticed if the economy had not tanked, is evidence of how many analysts and hacks drank the Jobs’ kool aid.

AMD’s problems are a lot more obvious. Each quarter it has to pay $49 million to service its huge debt pile. If it did not have to do this the company would have reported a non-GAAP operating profit of $67 million. In fact AMD's revenue rose 24 percent to $1.44 billion in the second quarter. The company said its third-quarter revenue would rise 2 percent, plus or minus 3 percent, from the June quarter. That would be about $1.47 billion. Analysts on average had expected revenue of $1.44 billion in the second quarter and $1.57 billion in the third quarter.

AMD's stock fell 15 percent in extended trade after the outfit said it had a net loss of $36 million in the June quarter, compared with a loss of $74 million, a year earlier. AMD has been expanding into non-PC markets like game consoles and low-power servers and it aims to obtain half of its revenue from those additional businesses by the end of 2015. It is also doing well in professional graphics. 

Revenue in the Computing Solutions Group dropped 20 percent from a year ago, to $669 million, as microprocessor unit shipments declined. But notebook processor sales rose, while AMD sold fewer desktop processors and chipsets. GPU revenue declined as well, partially offset by a rise in chips sold into graphics workstations and add-on cards.

Last modified on Friday, 18 July 2014 09:11

Nick Farrell

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