AMD reports loss, cautious on PC sales

Updated at 3:20 p.m. PDT throughout.

Advanced Micro Devices on Tuesday reported a net first-quarter loss of $416 million, or 66 cents a share, though revenue exceeded estimates.

AMD also refuted Intel statements that PC sales have hit bottom, though the company said inventory problems are improving somewhat.

This loss exceeds the loss reported one year ago, when the chipmaker posted a loss of $364 million, or 60 cents a share.

Revenue hit $1.18 billion, down 21 percent from the $1.5 billion posted last year, but better than reported estimates from analysts who had expected revenue of about $1 billion.

"Considering current macroeconomic conditions, limited visibility and historical seasonal patterns, AMD expects its Product Company revenue to be down for the second quarter of 2009," the company said in a statement.

Chief Executive Dirk Meyer refuted Intel sentiment about PC sales recovering. During Intel's first-quarter earnings conference call last week CEO Paul Otellini said that PC sales had "bottomed out" during the first quarter.

"I don't know how anybody can say we've hit bottom, considering the macroeconomic outlook," Meyer said during the AMD earnings conference call Tuesday afternoon.

"The economy is still weak, making it difficult to forecast end-user demand," Meyer added. AMD's factory utilization dropped off precipitously during the Christmas time frame and underutilization continued in the first quarter, Meyer said.

The AMD CEO also said that the average selling prices of notebook PCs was down because of a "shift toward lower-cost machines," in a reference to low-cost Atom-based Netbooks, among other notebook products.

On the upside, AMD is accelerating its shipment of the six-core "Istanbul" server chip, which will now be available in June, Meyer said. And the company is readying a successor to its single-core Neo processor for low-cost ultra-thin notebooks: the dual-core Congo processor will ship "in the back half of the quarter," Meyer said.

[Mr. Dee]

AMD - All-Most Dying

[monkeyfun14]

Look AMD is having a bit of a hard time but its definitely keeping Intel on its toes. We all know what happens when Intel gets lazy.

[Angmarr]

ya Intel seems to be killing them!

[Random_Walk]

For once, monkeyfun actually makes sense, and I agree with him on that point. If it wasn't for AMD (and to a lesser extent Cyrix, crap though it was), we'd still be paying $1k+ for mid-level CPUs, and heaven-only-knows-what for the new and sexy chips.

If it wasn't for Opterons, we'd all still be stuck with sucking hind teat on the NetBurst architecture (and using RAMBUS, no less... *shudder!*) We won't even talk about Itaniums.

Trust me - we've all been better off with AMD around.

To Intel's credit, they did manage to wake up and innovate in the face of competition. Then again, unlike operating systems, x86 is x86 is x86...

[slickuser]

Arab Micro Devices...

[winstein]

Neo based laptops are nice and affordable. But it generates too much heat (HP dv2) AMD needs to shrink the die to 45nm to really compete with Atom. The heat also may be coming from the the graphics chips. Also, $799 is a bit high for HP DV2, the price needs to be $450 or less to hit the ground running.

[Mr. Dee]

Even OLPC has dropped them like a hot potato! Shows how bad the situation has gotten. I do agree they fostered welcome competition and innovation especially where mainstream 64 bit computing is concerned. But, they had the ball in their court and let it slip away for some cheerleader named ATI.

[monkeyfun14]

Atleast ATI is kicking Nvidias ass atm

[v1m]

This is nothing. Wait until next quarter and the one after that.

For a lot of folks, it hasn't sunk in yet. The era of endless consumption, fueled by rising home prices and cheap foreign credit, is over.

Where the overbuilt tech industry fits into a reality-based American economy is kind of hard to see at this point. Think contraction -- hell, think bulimia -- with a bigger share in the end for those who can survive the famine. In chips, I'd bet that fattened calf is Intel.

[fdunn3]

HEY AMD! Where are the socket M3 Phenom II Quads with clocks better than 2.6GHz?

Also get your act together on the memory drive capability of your new chips so we can use higher clocked memory in dual channel without resorting to overclocking and/or tweaking.

I have a Phenom II 940 system and it is using 4GB of memory but to get the memory clock to stay at 1066MHz I had to single bank them, but it still screams.

Intel may have the fastest chips but AMD has the best bang for the buck.

[deecee]

Best bang for the buck chips don't make money for AMD, fastest chips with lots of profit margin do that for Intel though. So while you can brag about the value of AMD chips, I don't think it's a place AMD wants to be in, competing for value systems with no profit margin, that is.

[jpmccloud01]

1st AMD hit intel hard a couple of yrs ago, but Intel had the financial capital to reinvest and invest hard to give AMD a serious punch with it's core 2's and quads and now Atom's which infact hit VIA even harder I would like to see Neo's in other machines than just the Hp DV2. 2 nd what ever happens I do not think AMD is sunk like some say they may be, but I do think that some other company will look at them as a take over candidate in the next yr or so, when the stock price gets lower as it probably will. 3 rd Intel shouldn't be as worried about AMD, but in what that takeover company will be and should be looking at how to get over that hump. It's like a long term Chess match.

[pithenumber]

I think no one other than hp is using the Neo until AMD shrinks the die and gives it dual core in Q3 or Q4 this year I think

AMD still has ATi keeping them alive
no ones taking over AMD soon

[polis12]

Intel is destroying AMD currently in the performance department. I don't even look at AMD processors anymore and won't until they get their act together and put out something that can compete. Intel has dual cores that can benchmark just as well as some AMD's quads - shameful.

Some may claim AMD is more bang for the buck, but if you can use the Intel processor LONGER because it performs better overall to begin with, this all become an exercise in relativity.

[danielszabo1981]

v1m - I applaud you. Great comment.

[pithenumber]

yeah, and my Ph2 720 is faster than some of Intel's lower clocked quads quad core and most of Intel dual core [up to E8400]

[tipoo_]

The battle between 6-physical cores (AMD's upcoming Istanbul) and 4-phys.+4-virtual is going to be really interesting. Istanbul's inter-CPU bandwidth is leaps and bounds faster too. I think Istanbul will come close to reaching Nehalem Xeon performance and may even surpass them in virtualization tasks. H2 2009 will bring excitement back into the CPU race, and i think AMD will make it out OK.

[kalel33]

If AMD fails then we all fail, because Intel will have the monopoly and won't have to put as much R&D into their product because they won't have to beat out the competition. Without the competition, we'll see a very big slowdown on innovation and improvement.

[gnesterenko]

A - synthetic benchmarks mean abosultely zilch to those of us that actually use our computers for real applications. While some one there might be able to tell the diffence between 75 and 100+ FPS in gaming, that someone is certainly not me. If you going to try to bring up specific insances that the i7 is actually good for, save your breath. Seen the benchmarks. Seen the results. Don't care about any of the apps that an i7 actually helps. I suspect few outside the digital media creation realm do..

B - I buy a Phenom II for $200, you buy a core i7 today for say $400. In a year, I'll buy the nEXT phenom for another $200 which will then outperform your i7. I spent less because $200 in a year is worth less then $200 today (well lets hope this is true anyway...). This is of course wihtout accounting for the fact that with every new intel comes a new mobo (and sometimes even RAM). Not so the case for every AMD. In fact, any time someone tells me to get an Intel to "future-proof" my system, I can't help but laugh. Buying what you need for the next YEAR as opposed to what you'll need for the next TWO or THREE will always be economical in the comp tech industry.

"The views expressed here are mine and do not reflect the official opinion of my employer or the organization through which the Internet was accessed."

[deecee]

This is great for you as a consumer, being able to buy AMD at cheap prices, but it's a pitiful place for AMD to be as a company, chasing a widening top performance gap while Intel laughing all the way to the bank with the i7's. The article is about AMD making a loss as a company, not about who makes the better chip, blah, blah. As a company, I think there's little doubt Intel is now in a much better market and financial position than AMD. Bring in processor wars, i7 this, Phenom II that is completely irrelevant.
AMD as a company is performing poorly, there is no ifs, buts about it. AMD has a persimistic view of the rest of 2009 compared to the rosier picture from Intel. Considering the market position of the two companies don't think anyone can argue about any of this right now. Also, no one can truly predict the market overall anyway, so it's just one exec over another.
It's not a AMD chip vs. Intel chip thing, it's a business performance issue here, get out of your little circle of "my chp is better than yours" mentality, who cares!?