AMD Reports Second-Quarter Loss

Dom · Jul 16, 2003, 10:40 PM

Chipmaker Advanced Micro Devices beat its own estimates in reporting second-quarter earnings, but still reported a sizeable loss.

AMD reported a net loss of $140 million for the quarter ended June 29, on sales of $645 million. AMD reported a net loss of $185 million on sales of $600 million, and recorded a net loss of $146 million on revenue of $715 million for the first quarter of 2003.

"We are pleased we lowered our operating breakeven point to below $800 million and continued to realize improvements that better position us for growth and a return to profitability," said Robert J. Rivet, AMD's chief financial officer, in a statement.

"Despite the effects of the SARS epidemic and weaker than anticipated channel sales in some of our international markets, we reduced our net loss by 24 percent and increased our gross margin as a result of year-on-year sales growth and effective cost management," Rivet added. "Quarter-on-quarter, in spite of a sales decline of $69 million, we still managed to reduce our loss and improve our gross margin."

On June 24, AMD lowered its revenue forecasts to approximately $615 million, down from the $715 million figure the company had projected at the end of the first calendar quarter. At the time, AMD said that the revised projection was due to the absence of a global economic recovery, a decline in PC sellthrough in Asia and especially China, and the SARS outbreak.

AMD confirmed that the Athlon 64 is still on track to launch in September, specifically Sept. 23. The date is a day later than the one originally indicated by an AMD launch schedule accidentally leaked to journalists by AMD PR officials.

PC processor sales of $402 million were up 7 percent year-on-year and decreased by 14 percent from the $468 million reported in the first quarter of 2003. Although AMD increased its sales to its OEM base, those PC vendors were unable to turn around and sell through systems, especially to the Asian and European markets, the company said.

AMD said that memory sales slightly decreased due to the SARS outbreak in Asia, which affected sales of cellular handsets. However, the company partially made up for the loss through flash sales to the North American and European markets. In all, AMD reported $211 million in flash sales, down from $218 million in the first quarter but up significantly from the $175 million AMD reported in 2002.

AMD has $739 million in cash on hand and an untapped credit line of an additional $200 million, the company said..

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Source: ExtremeTech

nForcer · Jul 17, 2003, 03:38 AM

Maybe its me but how can a company do better than they expected but still loose money? Similar to taking 1 step forward, but 2 steps back.

AlternateVirus · Jul 17, 2003, 03:49 AM

because they did a major reconstruction recently, and most of the time the company lose money more than they expected by doing so, but in this case, ATi didnt and are happy that they lose lesser money than they expected.

Jul 16, 2003, 10:40 PM	#1
Dom DriverHeaven Extreme Member Join Date: Jun 2002 Posts: 12,940 Rep Power: 0	AMD Reports Second-Quarter Loss Chipmaker Advanced Micro Devices beat its own estimates in reporting second-quarter earnings, but still reported a sizeable loss. AMD reported a net loss of $140 million for the quarter ended June 29, on sales of $645 million. AMD reported a net loss of $185 million on sales of $600 million, and recorded a net loss of $146 million on revenue of $715 million for the first quarter of 2003. "We are pleased we lowered our operating breakeven point to below $800 million and continued to realize improvements that better position us for growth and a return to profitability," said Robert J. Rivet, AMD's chief financial officer, in a statement. "Despite the effects of the SARS epidemic and weaker than anticipated channel sales in some of our international markets, we reduced our net loss by 24 percent and increased our gross margin as a result of year-on-year sales growth and effective cost management," Rivet added. "Quarter-on-quarter, in spite of a sales decline of $69 million, we still managed to reduce our loss and improve our gross margin." On June 24, AMD lowered its revenue forecasts to approximately $615 million, down from the $715 million figure the company had projected at the end of the first calendar quarter. At the time, AMD said that the revised projection was due to the absence of a global economic recovery, a decline in PC sellthrough in Asia and especially China, and the SARS outbreak. AMD confirmed that the Athlon 64 is still on track to launch in September, specifically Sept. 23. The date is a day later than the one originally indicated by an AMD launch schedule accidentally leaked to journalists by AMD PR officials. PC processor sales of $402 million were up 7 percent year-on-year and decreased by 14 percent from the $468 million reported in the first quarter of 2003. Although AMD increased its sales to its OEM base, those PC vendors were unable to turn around and sell through systems, especially to the Asian and European markets, the company said. AMD said that memory sales slightly decreased due to the SARS outbreak in Asia, which affected sales of cellular handsets. However, the company partially made up for the loss through flash sales to the North American and European markets. In all, AMD reported $211 million in flash sales, down from $218 million in the first quarter but up significantly from the $175 million AMD reported in 2002. AMD has $739 million in cash on hand and an untapped credit line of an additional $200 million, the company said.. ________________________ Source: ExtremeTech

Jul 17, 2003, 03:38 AM	#2
nForcer Twice the fun! Join Date: Jul 2002 Posts: 1,404 Rep Power: 0	Maybe its me but how can a company do better than they expected but still loose money? Similar to taking 1 step forward, but 2 steps back.

Jul 17, 2003, 03:49 AM	#3
AlternateVirus DriverHeaven Addict Join Date: May 2002 Posts: 282 Rep Power: 0	because they did a major reconstruction recently, and most of the time the company lose money more than they expected by doing so, but in this case, ATi didnt and are happy that they lose lesser money than they expected.