AMD loses half a billion dollars in first quarter
After posting a worrying revenue warning ten days ago, AMD has finally announced its first-quarter financial results. At $1.233 billion, the company's first-quarter revenue is actually about $5 million higher than the warning stated. Considering AMD had revenue of $1.773 billion in the fourth quarter and initially expected $1.6-1.7 billion for the first quarter, though, that figure represents a dramatic drop indeed. AMD also suffered an operating loss of $504 million—not as bad as its $529 million loss from last quarter, but still not exactly an improvement. AMD says its revenue decline was also due to "significantly lower" processor unit sales and lower average selling prices.
Another of AMD's problems was its shrinking margin, which took a nosedive to 29% in the first quarter. For reference, it was 36% in the fourth quarter of last year and 58% a year before.
Unsurprisingly, AMD's Chief Financial Officer Robert J. Rivet states in the revenue announcement the company's first quarter performance is "disappointing and unacceptable." He adds that AMD is aligning its business model, capital expenditures, and cost structure in order to become profitable again, and that customer relationships remain strong. AMD doesn't expect its income to improve in the short term, though. This quarter, the firm expects revenue will be "flat to slightly up" from last quarter's $1.233 billion.