AMD financial results predictions thread

[georgec84]

Should have sold my AMD stock when it peaked around $10/share last fall. I root hard for these guys, but they just don't have the cash, R&D, and fab capabilities to compete with Intel.

 

[pelov]

Laptops: Intel is actually pricing their products very aggressively on the low end. Sandy Bridge i3/i5 and Ivy Bridge i3/i5 costs an identical $225 for list pricing, but they have volume discounts. The pricing from cheap to most pricey is Sandy Bridge i3/Ivy Bridge i3/Sandy Bridge i5/Ivy Bridge i5.

That is reflected in Intel's ASPs of being only $100, in what they call "Premium category", basically all Core chips.

I noticed this recently because I'm looking for a new lappie. I was expecting the Intel chips to be quite expensive but the current Ivy stock can be found at very good prices. It seems that laptop prices in general have decreased across the board and after that >3% gain in a single year in total market share by AMD with Llano, Intel has realized they've got to price their chips better. You can actually find a new Ivy i5 laptop for under $500. That's a great price although the accompanying hardware and the screen is going to leave you asking for more. (sometimes I wish laptop manufacturers would ship you a laptop without a display at all. BTW, did you know that a 1080p 95% color gamut display only costs ~$15-$20 more?)

Even still, I doubt it's Intel's sales that have caused that drop in earnings for AMD. I've been reading about a sharp decline in demand across Europe and Asia (mainly for PCs and laptops) and given the uncertainty of the market it's not exactly surprising to see this. 2012 was expected to be a bad year for the chip industry

This doesn't matter, though. Even when AMD was king of the hill they weren't making money and have essentially been floating just barely above water since the company was first conceived. They really need to put their heads together and come up with something attractive and out of left field. This HSA/Fusion initiative makes sense but the implementation has been far too slow and although the performance gains are decent (comparing Llano to Trinity), you'd figure a better Bobcat/Brazos platform would have paid off far more. I suppose that the GloFo issues hurt them more than we may have thought in that regard. The Brazos platform was awesome and the lack of an improved 28nm follow-up really sucks.

 

[Idontcare]

I suppose that the GloFo issues hurt them more than we may have thought in that regard. The Brazos platform was awesome and the lack of an improved 28nm follow-up really sucks.

This is very true, they had something that was golden with 40nm Brazos, and then the failure to execute in delivering a timely 28nm shrink is really one of those kind of epic missteps that everyone fears - snatching defeat from the jaws of victory.

 

[pelov]

It's one of the only times in recent memory that one can say that AMD had a better product than Intel without any exceptions whatsoever. The only other time that was true was back during the Amd64/X2 days. It really was that good when it first came out. A 28nm shrink and advancement of that I'm sure would have been great as well. With a decent and presumably expected gain it would have been enough to power this Ultrabook craze at much cheaper prices.

If anyone needed a reason for why AMD is deciding to go bulk...

 

[AtenRa]

AMD Announces Preliminary Second Quarter Results
Revenue Expected to Decrease Approximately 11 Percent Sequentially; Company Effectively Manages Gross Margin

SUNNYVALE, Calif. —7/9/2012

AMD (NYSE:AMD) today announced that revenue for the second quarter ended June 30, 2012 is expected to decrease approximately 11 percent sequentially. The company previously forecasted second quarter 2012 revenue to increase 3 percent, plus or minus 3 percent sequentially. The lower preliminary revenue results are primarily due to business conditions that materialized late in the second quarter, specifically softer-than-expected channel sales in China and Europe as well as a weaker consumer buying environment impacting the company's Original Equipment Manufacturer (OEM) business.

The company expects second quarter gross margin to be approximately in line with prior guidance. Operating expenses for the second quarter are expected to improve and to be approximately 8 percent less than prior guidance of approximately $605 million, a result of tightly controlled expenses in the quarter.

AMD will report second quarter 2012 results after market close on Thursday, July 19, 2012. AMD will hold a conference call for the financial community at 2:00 p.m. PT (5:00 p.m. ET) that day to discuss second quarter financial results and to provide information regarding expected third quarter results. AMD will provide a real-time audio broadcast of the teleconference on the Investor Relations page at http://www.amd.com. The webcast will be available for 10 days after the conference call.

Can anyone tell me what was the prior gross margin guidance ??

 

[AtenRa]

If gross margin is approximately the same as last quarter (Q1 =773M) and we also have 8% reduction in Operating expenses (605M -8%= ~557M) then they could have a Net Income from ~143M (with 700M gross margin) or 216M (with 773M gross margin). It all comes to the Gross Margin.

Accounting is not my strongest field, if im mistaken then plz explain

 

[ShintaiDK]

Gross margin is counted in %.

http://www.wikinvest.com/stock/Advanced_Micro_Devices_(AMD)/Data/Gross_Margin

And a reuse of Q1 2012 is bad, really bad.

Gross margin 2 percent, non-GAAP gross margin 46 percent.

 

[AtenRa]

Sorry, that should be Operating Income of 143M to 216M.

So taking out any expenses they could have Net Income from 90-100M to 140-160M.

Assuming they don't have more expenses than Operating Income

 

[AtenRa]

Yes, the 2 percent Gross Margin was that low because they paid 703M to GloFo and that amount was calculated in the Cost Of Sales (Cost Of Goods Sold or COGS).

 

[Phynaz]

Sorry, that should be Operating Income of 143M to 216M.

So taking out any expenses they could have Net Income from 90-100M to 140-160M.

Assuming they don't have more expenses than Operating Income

If you want in, pick a number for GAAP net, not a range

 

[AtenRa]

If you want in, pick a number for GAAP net, not a range

Ok lets see,

Net Income 97M

 

[Siberian]

I think tablets and smartphones are eating away at the low end PCs. Which is a big market for AMD.

 

[Nemesis 1]

Net loss 73 million

 

[IntelUser2000]

Even still, I doubt it's Intel's sales that have caused that drop in earnings for AMD. I've been reading about a sharp decline in demand across Europe and Asia (mainly for PCs and laptops) and given the uncertainty of the market it's not exactly surprising to see this. 2012 was expected to be a bad year for the chip industry.

I think its a combination of loss in marketshare and that promised parts are still vaporware. Having only ~20% marketshare coupled with the fact months before new AMD products launch, hype reaches a fever point. So when they don't deliver, the people who'd have bought AMD either stop entirely, or go Intel.

As for Brazos they probably decided that Trinity could reach the same TDP level while performing better in Graphics and CPU, fetching more dollars as well.

 

[Phynaz]

Edit:

Nevermind, I don't want to take my own thread off topic.

 

[pelov]

From TR:

These aren't the best times for the PC industry. Gartner has posted preliminary numbers for this year's second quarter, and it looks like PC shipments fell by 0.1% compared to the same quarter a year back—from 87.56 million units to 87.47 million. According to Gartner analyst Mikako Kitagawa, that makes Q2 2012 the "seventh consecutive quarter of flat to single-digit growth" for the PC market.

Gartner pins the blame on "uncertainties in the economy in various regions, as well as consumer's low interest in PC purchases." Not surprisingly, the research firm says consumers are more interested in the latest tablets and smartphones than in upgrading their PCs. Also, despite Intel's best efforts—not to mention a fair amount of buzz from PC vendors—ultrabooks don't seem to be generating much excitement. "Shipment volume was small and little impact on overall shipment growth," says Gartner in reference to the new thin-and-light systems.

Along with all the doom and gloom, Gartner's report includes market share data for major PC vendors. In the United States last quarter, it seems Apple was the only vendor in the top five whose shipments didn't recede. The Mac maker saw 4.3% unit growth from Q2 2011 to Q2 2012, and it remained firmly in third place, with its market share inching up from 10.8% to 12%. Acer, the next biggest PC vendor in the U.S. by volume, had its share slip from 9.3% to 8.5% over the same time period.

Worldwide, Asian PC makers have apparently fared better than their American counterparts. Lenovo, Acer, and Asus all saw their shipments go up, while HP and Dell both suffered declines of around 12%. HP now seems in danger of losing the top-dog spot to Lenovo: it was ahead by 4.2 points last year, but the two firms are now almost on even footing, with 14.7% and 14.5% of the global market, respectively. Dell, meanwhile, has already lost the number-three spot to Acer.

Sounds like not having an Apple contract hurt them more than anything else.

Also, despite Intel's best efforts—not to mention a fair amount of buzz from PC vendors—ultrabooks don't seem to be generating much excitement.

This doesn't surprise me. If somebody wants an accessory that resembles a laptop rather than a tool then they'd buy Apple anyway. Intel needs to readdress their Ultrabook approach. It's all sorts of weird.

 

[ninaholic37]

This doesn't surprise me. If somebody wants an accessory that resembles a laptop rather than a tool then they'd buy Apple anyway. Intel needs to readdress their Ultrabook approach. It's all sorts of weird.

Yup. I never really cared for them either, and wouldn't have any problem with the whole "Ultrabook category/name" disappearing. Anyone with half a brain can tell if something is light, has an SSD, or is 'genuine intel' (I didn't know they made fake/counterfeit Intel chips).

 

[thilanliyan]

Prices of ultrabooks are not that bad however. I don't really care what they call it. It's a decent laptop for the prices they are available at.

 

[Khato]

Yup. I never really cared for them either, and wouldn't have any problem with the whole "Ultrabook category/name" disappearing. Anyone with half a brain can tell if something is light, has an SSD, or is 'genuine intel' (I didn't know they made fake/counterfeit Intel chips).

The only point I'd disagree with here is with respect to SSDs. Yes, it's easy to tell if a computer has one, but even now they're rarely to be found outside of Ultrabooks except as an overpriced option on custom configurations. Of course they're unfortunately backing off that to allow for SSD caching as acceptable, which is unfortunate.

Regardless, it'll be interesting to see where things go. I still have a positive impression of Ultrabooks primarily for the fact the resulting drive towards quality rather than making things as cheap as possible. Most people are willing to pay for quality if they're able to, but that fact seemed to have been lost upon the PC manufacturers for quite some time.

 

[StrangerGuy]

Gartner pins the blame on "uncertainties in the economy in various regions, as well as consumer's low interest in PC purchases." Not surprisingly, the research firm says consumers are more interested in the latest tablets and smartphones than in upgrading their PCs. Also, despite Intel's best efforts—not to mention a fair amount of buzz from PC vendors—ultrabooks don't seem to be generating much excitement. "Shipment volume was small and little impact on overall shipment growth," says Gartner in reference to the new thin-and-light systems.

How about the PC industry obsession with SKU flooding and cost cutting to max basically left them with less and less volume and razor-thin margins, and also gave Apple a free reign over the non bargain bin sector? It's not that hard to see what's wrong.

 

[gammaray]

If AMD comes up with an income profit, that would be the third times in a quarter over 10 years. I seriously wonder how they can still be in business.

Where the money comes from ?

 

[frozentundra123456]

Prices of ultrabooks are not that bad however. I don't really care what they call it. It's a decent laptop for the prices they are available at.

I have mixed feelings about the ultrabooks. The problem is that they are kind of in the middle between tablets/smartphones and conventional laptops. At a given price point, you give up a lot of performance and thermal headroom vs a conventional laptop but still dont really have the portability of a tablet/smartphone, especially since you still really need to carry a mouse around as well. At least for me, because I hate touchpads.

As much as I think Win 8 will suck for desktops, it might be a big step forward for ultrabooks if it can do away with the need for a mouse.

Edit: What happened to the earnings results for AMD. I thought they were supposed to be posted yesterday after close, but still could not find anything tonight.

 

[AtenRa]

@frozentundra123456

AMD will report second quarter 2012 results after market close on Thursday, July 19, 2012.

 

[carop]

I suppose that the GloFo issues hurt them more than we may have thought in that regard. The Brazos platform was awesome and the lack of an improved 28nm follow-up really sucks.

GlobalFoundries is not producing AMD's "Ultra Low Power" APUs. Their ULP APUs are built by TSMC. Hondo (1st Generation "Bobact" cores) is using the 40nm design, and is supposed to be introduced in 2012. Temash (2nd Generation "Jaguar" cores) is using 28nm design, and will be released in 2013.

Jaguar is an evolution of the Bobcat core, and will also integrate the Fusion Controller Hub (aka South Bridge) making it the first true single-chip solution from AMD. Anandtech's (a pro-Intel side according to AMD) candid opinion of the Bobcat microarchitecture was as follows:

It isn’t just CPU architecture that AMD surpassed Atom with, the first incarnation of Bobcat is an integrated SoC with on-die DirectX 11 GPU.

http://www.anandtech.com/show/4134/the-brazos-review-amds-e350-supplants-ion-for-miniitx

AMD knows well that 4.5 W is high for tablets. John Taylor, director of client product marketing and software at AMD, on Windows 8 tablet strategy:

For tablets, it will decidedly be the Hondo chip. We're acknowledging that we still have a couple of watts to shave off to really be a more ideal tablet platform (to achieve optimal power efficiency). But we think that Temash gets us much, much closer to that in 2013. Hondo will also allow us to get into fanless clamshells (a more traditional ultrathin laptop).

http://news.cnet.com/8301-13924_3-57370936-64/amd-spells-out-windows-8-tablet-strategy/

Even though it is capacity constrained (Qualcomm and TSMC can only blame themselves for the constrain), 28nm process has been in production at TSMC. And it is available to "shave off a couple of watts". If AMD is going to be late to the tablet show, this will be because of a lack of strategic direction on their part.

Intel's Windows 8 tablet checklist has been public for some time now:

3G/4G is a must have for tablets, and Intel bought the wireless hardware from a small chip company called Infineon. They have a chip called Bay Trail (22nm follow up to Clover Trail) in the works, and it will have the Infineon 3G/4G silicon inside.

Does AMD have a tablet checklist?

 

[Haserath]

I'm surprised there are so many that think AMD will lose tons this quarter. To me, it looks like they'll make around a $20M profit as long as they don't have another 'one time charge.'