AMD Posts Small Loss, Sharply Increased Sales

AMD announced its second-quarter earnings yesterday and the company's results, while not perfect, imply continued strong execution. The company's revenue was up 40 percent year-on-year on strong demand for server and mobile parts. Total revenue was $1.65B, up five percent from the first quarter.

"Robust demand for our latest mobile platforms and solid execution drove record second quarter revenue and a healthy gross margin," said Dirk Meyer, AMD President and CEO. "Our unmatched combination of microprocessor and graphics capabilities resulted in customers launching a record number of new mobile and desktop platforms. We added Sony as a microprocessor customer and continue to see our existing customers expand their AMD-based platform offerings."

AMD still posted a net loss of $43 million, but the loss was the result of continued restructuring between AMD and GlobalFoundries rather than indicative of an ASP drop or reduced volume. AMD's CPU business (Computing Solutions) posted a gain of four percent sequentially and 31 percent year-on-year, driven mostly by mobile CPU and chipset sales. Server volumes were within expectations; AMD expects to realize the full positive financial impact of its new products in Q3.

GPU Gymnastics

Llano is, in a very real sense, the glue that holds AMD's CPU and GPU segments together; it bears the responsibility of proving the ATI/AMD merger was a good idea. As far as the GPU side of its business is concerned, AMD's numbers were again positive. The GPU segment reported net revenue of $440 million, up 7.5 percent quarter-on-quarter and 87 percent year on year. AMD has clearly benefited from its near-dominance of the DX11 market since Windows 7 launched; the company continues to talk up its top-to-bottom series of DX11 products.

NVIDIA's Fermi was technically available through most of the second quarter, but only in high-end flavors. Now that the GTX 465 and GTX 460 cards are available, we'd expect AMD to face a harder fight when it comes to maintaining DX11 marketshare. nevertheless, the ATI acquisition is contributing a net positive towards AMD's bottom line, even if it's only a few million dollars.

Llano, important as it is to AMD's bottom line, has since been pushed back a few quarters and replaced with a new Bobcat/GPU Fusion hybrid. More information available shortly.