Earlier this month, AMD announced that its first-quarter revenue would be below expectations, and it looks like it wasn't kidding. The company posted its Q1 financial results earlier this afternoon and reported revenue of $1.505 billion, down 15% from the fourth quarter of last year and up 22% from the same time period last year. That doesn't look too bad, but AMD's net income (or lack thereof) is a much greater cause for concern.
Indeed, AMD has posted a net loss of $358 million and an operating loss of $264 million for the first quarter. That second figure represents a clear step back from the fourth quarter of 2007, when AMD's operating loss was only $9 million. At first glance, the net income figure appears more tame than the $1.772 billion net loss AMD posted in Q4 '07. However, considering $1.608 billion of that $1.772 billion corresponded to a write-off of non-material assets, AMD seems to have registered a greater material loss in Q1 '08.
AMD CFO Robert J. Rivet attributes this poor performance to "a seasonally weak first quarter . . . amplified by a challenging economic environment for consumers and lower than expected revenues of previous generation products." AMD's sales were lower than expected in all of its business segments, Rivet adds. To make things worse, AMD's gross margin slumped from 44% in Q4 '07 to 42% in Q1 '08, although it's still higher than the paltry 28% the company recorded in Q1 '07.