bbmf
21st October 2007, 05:31 AM
AMD reports that revenue is up, but slimmer margins and a $120 million acquisition sapped the bottom line.
Advanced Micro Devices posted a net loss of $396 million, down from a $136 million gain a year ago, and the chip maker's fourth straight fiscal quarter loss.
AMD posted $1.6 billion total revenue for the third quarter?an improvement of 18 percent compared to the second quarter of 2007 and nearly 23 percent better than the $1.3 billion it posted a year ago?but a $120 million charge for the 2006 acquisition of ATI hurt AMD's bottom line. Wall Street analysts had anticipated $1.52 billion in revenue.
The loss comes at a time when demand for PCs is high. On Oct. 17, IDC reported that worldwide PC shipments increased about 15 percent during the third quarter and AMD reported that its microprocessor shipments increased 16 percent compared to the second quarter of this year.
Despite those numbers, AMD's gross margins?a key metric in determining profitability and market share?were down to 41 percent compared to 51 percent this time last year.
The numbers indicate AMD shipped more processors this quarter than the last quarter, but predominantly the lower priced laptop and desktop models, meaning AMD-based notebooks and desktops were less expensive to buy. Higher costs also impacted the margin.
http://www.eweek.com/article2/0,1759,2202029,00.asp?kc=EWRSS03119TX1K0000594
Advanced Micro Devices posted a net loss of $396 million, down from a $136 million gain a year ago, and the chip maker's fourth straight fiscal quarter loss.
AMD posted $1.6 billion total revenue for the third quarter?an improvement of 18 percent compared to the second quarter of 2007 and nearly 23 percent better than the $1.3 billion it posted a year ago?but a $120 million charge for the 2006 acquisition of ATI hurt AMD's bottom line. Wall Street analysts had anticipated $1.52 billion in revenue.
The loss comes at a time when demand for PCs is high. On Oct. 17, IDC reported that worldwide PC shipments increased about 15 percent during the third quarter and AMD reported that its microprocessor shipments increased 16 percent compared to the second quarter of this year.
Despite those numbers, AMD's gross margins?a key metric in determining profitability and market share?were down to 41 percent compared to 51 percent this time last year.
The numbers indicate AMD shipped more processors this quarter than the last quarter, but predominantly the lower priced laptop and desktop models, meaning AMD-based notebooks and desktops were less expensive to buy. Higher costs also impacted the margin.
http://www.eweek.com/article2/0,1759,2202029,00.asp?kc=EWRSS03119TX1K0000594