AMD Blames Poor Q2 Results on Soft Sales in China and Europe

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News Posted: Tue, Jul 10 2012 10:12 AM
Advanced Micro Devices (AMD) saw its share price drop by more than 8 percent after announcing preliminary second quarter financial results with lower than expected sales numbers. The chip designer told investors it expects revenue to dip around 11 percent sequentially in Q3, which is in sharp contrast to a previous forecast of a 3 percent gain, plus or minus 3 percent.

"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," AMD explained.

AMD Processor
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Some are blaming AMD's struggles on the rise in popularity of tablet PCs, a category that has been dominated by ARM processors up to this point. AMD also faces stiff competition from Intel's well received Ivy Bridge platform, which sits in the driver's seat of the latest generation of Ultrabooks.

Read more about AMD's situation as analysts tussle over how much the company is worth.
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Joel H replied on Tue, Jul 10 2012 3:16 PM

We shall see. If demand is truly drying up in China / Europe, it'll impact Intel as well. The fact that it hasn't suggests competitive pressure is hurting Sunnyvale quite a bit more than simple demand .

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Well said Joel. Intel don't really have a strong smartphone/tablet chip in mass produced devices(YET), and they aren't missing earnings expectations. Their current lineup in general is inferior to Intel's, and the market is recognizing that.

This is just an excuse from AMD. More "spin". Reminds me of those bulldozer ads beating the 990x in video conversion (ha ha). We don't need more spin from AMD.

They said similar things when GTX 680s were flying of shelves and 7970s were not: "NVIDIA can't make enough stock". Nope, the fact was people were flocking to the superior (not by much) Kepler cards.

I hope Read and his team can turn things around. AMD has been run in shambolic fashion for as long as I can remember.

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Schmich replied on Sun, Jul 15 2012 6:29 PM

Intel didn't break any records like it did last year. AMDs line-up isn't inferior as it prices its chips according to its performance. Just because Intel has a $600 CPU doesn't mean people need or will buy it. Also, AMD's APU are better than Intel's however supply is pretty short. It's better than it was back on Llano now that they use TMSC. The GPU side of their APUs runs circles around Intel's HD4000.

Nvidia definitely had and still has problems with GTX680 yields. I'm pretty sure even HHW mentioned several times that Nvidia's lack of supply is the worse seen in a long time, if not the worst all-time. Usually yields improved after a month or 2 but for Nvidia it took much longer and the GPUs can still barely be found in Europe. I actually ordered four GTX680s over a month ago here in Switzerland. They still are nowhere to be seen (why four? It was a good price so I'm taking 2 and a friend will buy 2 off me).

The reason for the huge supply of GTX670s is because of the enormous amount of GTX680 that didn't reach minimum level.

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