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Slower consumer spending and lower demand from retailers led to Garmin's "most challenging quarter" since going public in 2000, the GPS device maker's CEO said Wednesday.

Total revenue for Garmin's first quarter, which ended March 29, dropped to $437 million, down 34 percent from $664 million in the first quarter of 2008.

Earnings per share sunk to 24 cents from 67 cents in the year-ago quarter, marking a 24 percent drop. That compares with expectations of analysts polled by Thomson Reuters of 42 cents per share on revenue of $531.6 million. Excluding the impact from foreign-exchange rates, earnings per share decreased 64 percent year over year, to 25 cents from 69 cents.

Garmin records a year-over-year drop in first-quarter earnings.

(Credit: Garmin)

Garmin's geographical units each saw weaker results. North American revenue fell to $265 million, compared with $411 million in the same quarter of 2008, down 36 percent. Sales in Europe dropped to $144 million from $211 million, down 32 percent. Revenue in Asia was $28 million, compared with $42 million, down 33 percent.

Advanced Micro Devices has its eye on the ultra-low-cost notebook market. Dirk Meyer--the company's new CEO--and other executives discussed this and ways to make the company profitable during the company's earnings conference call Thursday.

HP 2133 Mini-Note is a low-cost ultramobile notebook--a market AMD is eying.

(Credit: Hewlett-Packard)

Meyer--promoted to CEO on Thursday--made it clear that AMD is serious about the so-called Netbook market, where Intel's Atom processor has been the most successful so far. (Though Intel CEO Paul Otellini made a perplexing comment Tuesday about the Atom processor.)

Netbooks have two hallmarks: they are typically under $400 and are extremely small and light. The Asus Eee PC is the most popular Netbook currently.

In response to a question from an analyst, Meyer implied that while AMD is not interested in the mobile Internet device market (think: iPhone), it is serious about low-cost notebooks.

"We're a much smaller company with not nearly the scale that our competitor has," Meyer said. "We don't intend to try to do absolutely everything they do in the marketplace. (But) slightly smaller form factor notebooks and inexpensive notebooks. That is a market segment that we're interested in."

AMD is already taking concrete steps to get into this market.

"It's actually a segment that we're starting to offer products to our customers in support of now," Meyer said. "We actually haven't talked in public about that, but I expect we'll be talking about that roadmap when we get together in November at our analyst conference."

Meyer and other executives also addressed upcoming 45-nanometer processors, new graphics chips, and the so-called "asset-lite" strategy as ways to bring the company back to profitability.

Chief Financial Officer Bob Rivet said upcoming 45-nanometer processors and the eventual outsourcing of more production to companies like Taiwan Semiconductor Manufacturing Company (TSMC) will be the keys to long-term sustained profitability.

"Our strategy to continue to execute on 45 nanometer improves our cost structure," Rivet said. He added that improving profitability also "does incorporate asset-smart (and) execution by Hector (Ruiz) to bring it to conclusion." Analysts refer to the outsourcing strategy as asset-lite, AMD refers to it also as "asset-smart." Outgoing CEO Hector Ruiz will stay on to execute the asset-lite strategy.

Rivet later added that asset-lite "will be a major reformation of the company."

On upcoming 45-nanometer production, Meyer said: "We're well on track with the 45-nanometer plan. We actually started production late last quarter and on track to begin volume shipment early in Q4." AMD currently uses a 65-nanometer manufacturing process for most of its silicon. Intel, on the other hand, has been shipping 45-nanometer processors since last year and its newest Centrino 2 processors are made on a 45-nanometer process.

New graphics chips will also help, according to Rivet. "The new 4800 series will be the best products in the marketplace. (This) will definitely contribute to gross margin," he said. AMD is struggling to get the all-important financial benchmark of gross margin to above 40 percent. It is now at 37 percent. By comparison, Intel's gross margin was just below 56 percent in the second quarter.

About profitability in general, Rivet said: "Since we're so far away from profitability. The first order of magnitude is operating profit at the operating income level not at the net income level. First get to that level then we'll work to get the net," he said. Rivet said AMD will show an operating profit in the second half.

AMD continues to stumble through another down year.

The company announced along with the release of its second-quarter earnings results Thursday that it is getting out of the handheld and digital television businesses. As has been the case for the last several quarters, AMD is continuing to lose bucketloads of money: $1.2 billion this time around.

The $1.2 billion isn't as bad as it looks at first glance, but it's still pretty bad. In order to get out of the business of making graphics chips for handhelds and digital TV processors, AMD has to take a one-time charge of $876 million, which accounts for the majority of the loss.

The charge relates to the amount of goodwill attached to the company's $5.4 billion purchase of ATI Technologies in 2006: goodwill is an accounting term that in this case, stands for "the amount by which we overpaid." AMD attached $3.2 billion in goodwill to the ATI merger, and has now written $2.5 billion of that goodwill off its balance sheet with the divestiture of the former ATI's consumer chip business.

But even with the one-time charges out of the way, AMD lost $269 million on "continuing operations," such as its processor and graphics businesses. That's a little better than last year's loss of $531 million from those businesses, but AMD still has plenty of work turning itself into a profitable company in the second half of the year, its stated goal.

With Intel looking very solid, it's going to be a crucial six months for AMD CEO Hector Ruiz and his executives if they want to remain employed by the company in 2009. Despite getting its much-delayed Barcelona processor shipping in volume to customers and launching a new notebook processor without incident--not to mention a relatively healthy PC market--AMD still managed to lose money.

Video game giant Electronic Arts on Tuesday posted fourth-quarter revenues that beat Wall Street expectations and looked ahead to fiscal 2009, when it expects to release 15 new games.

Net revenue for the quarter was $1.127 billion, up 84 percent as compared with $613 million for the prior year, the company said. Net loss for the quarter was $94 million, widening from a net loss of $25 million for the prior year.

"On balance, we're very pleased with our revenue growth, but not yet happy with our profit margins," EA CEO John Riccitiello said in a statement. "In fiscal 2009, we expect to deliver another $1 billion in revenue growth and to double our operating profit on the strength of our slate of titles."

Electronic Arts, which is based in Redwood City, Calif., is attempting to buy Take-Two Interactive Software, maker of the blockbuster Grand Theft Auto series, for $2 billion.

Apple's earnings report today was stellar for the company and its shareholders--the 67% increase in profits over the year-ago quarter was particularly noteworthy. But I noticed that iPod sales came in short of some financial analysts' expectations. Looking back at recent Apple earnings calls on iLounge, I noticed that this was the case in Q2 and Q3 as well. (Apple's fiscal year begins Oct. 1, so this was Q4.)

Apple CEO Steve Jobs unveiled the iPod Touch in September.

(Credit: Ina Fried/CNET News.com)

More generally, iPod unit sales aren't growing as quickly as they used to. Here's year-to-year iPod unit growth for the last five quarters, again reported by iLounge:
Q4: 17%
Q3: 21%
Q2: 24%
Q1: 28%
Last year's Q4: 35%. It was this stellar result that caused one analyst to predict that iPod growth could continue around 30 percent.

At first glance, this appears to be the law of large numbers kicking in. But wait: there's a new product since last year--the iPhone. (You might have heard of it.) Apple sold 1.1 million of those, bringing the iPod-plus-iPhone total to 11.3 million. Which makes for unit growth of--you guessed it--30 percent.

Another caveat: the iPod Touch didn't become available until Sept. 28, almost at the end of the quarter. That should goose sales even further. Point being, the iPod juggernaut may be slowing, but if you include the iPhone, Apple's device business is as strong as it's ever been.

An interesting side note: Microsoft reports earnings on Thursday, and in its last earnings call, it predicted quarterly revenue of $12.4 billion to $12.6 billion. If it makes those numbers, that means Apple's now approximately half the size of Microsoft in terms of quarterly revenue. That's a stunning development for anybody who's familiar with the companies' positions five or ten years ago.