AMD saw operating income grow in the third quarter

Hot on Intel’s heels, AMD has posted its results for the third calendar quarter. AMD did lower its guidance before the quarter was through, and just like Intel, its final results were in line with revised estimates. All things considered, though, the quarter could’ve gone worse:

  Q3 2009 Q2 2010 Q3 2010
Revenue $1.40 billion $1.65 billion $1.62 billion
Operating income -$77 million $125 million $128 million
Net income -$128 million -$43 million -$118 million
Gross margin 42% 45% 46%

You’re looking at a slight sequential decrease in revenue coupled with an increase in both AMD’s operating income and gross margin—although AMD still posted a net loss. CEO Dirk Meyer commented in the results announcement, "AMD’s third quarter performance was highlighted by solid gross margin and a continued focus on profitability, despite weaker than expected consumer demand."

AMD says its Computing Solutions business unit saw flat sequential growth, while its graphics business actually took an 11% dive in revenue compared to the second quarter. Both units saw year-over-year growth, though. Interestingly, the company goes on to note that, while it saw "record" shipments of notebook CPUs in Q3 ’10, shipments of notebook GPUs actually went down. I expect the arrival of Nvidia’s GeForce 400M graphics processors might have had something to do with that.

Comments closed
    • esterhasz
    • 9 years ago

    Yeah you’re right. I thought that the non GAAP allowed them simply to exclude investment losses from the balance sheet, my bad. Still though, if you take the lowered value of the GF investment out of the picture, they’re making money which means that the business fundamentals no longer as shitty as they were the last couple of years…

      • esterhasz
      • 9 years ago

      meant to reply to #8 sorry…

    • Frith
    • 9 years ago

    I can never understand how companies like AMD can keep losing money and stay in business. They lost $289million in just three quarters and have been losing money for years. Where does all this money come from?

    On anther matter, does anybody else wish AMD hadn’t bought ATI. If you buy an AMD processor now you end up with an ATI chipset and my experience of ATI is that their drivers are consistently abysmal. I bought a Phenom II X6 1090T when it came out and, while I’m very happy with the CPU’s performance given the price, I’ve been less than impressed with the ATI chipset and for this reason won’t be buying AMD again.

      • Deanjo
      • 9 years ago

      I agree, it really sucks that your limited to ATI chipsets with AMD procs. I’ve always have had far better success with Nvidia chipsets on AMD procs. Better performance, less chipset errata that has to be worked around and better reliability.

      • bdwilcox
      • 9 years ago

      What’s wrong with the chipset? I’ve had numerous AMD chipsets and have been pretty happy except for a few niggling issues like AHCI performance and the like, but most of those issues have been fixed with their newer chipsets. Coming from the VIA, SiS, ALi generation, perhaps I have a different definition of a “poor chipset”.

      • wira020
      • 9 years ago

      I seriously wonders sometime, why is people complaining so much about AMD’s chipset?.. I have nothing to complain so far.. But maybe this is because I’ve never used Intel before.. Still, I have nothing to complain about to this day…

        • willyolio
        • 9 years ago

        i’m having a great time with an ATI chipset. i managed a 50% overclock on it, and i can play L4D fairly smoothly. pretty good for onboard graphics.

          • dashbarron
          • 9 years ago

          Urgh, L4D isn’t that intensive: it is a Valve game afterall.

      • mutarasector
      • 9 years ago

      Sorry AMD aquired TI? Hardly… AMD wouldn’t have survived this long without becoming a complete platform vendor. Way back when, the timing of their aquisition may have been a tad off, but in the grand scheme of things, AMD’s ATI aquisition is what kept the company treading water in turbulant economic times, and kept them within striking range of hitting the black ink. The cash infusion from the AMD/Intel settlement was the final nudge that got AMD from “treading-water-in-a-sea-of-red” status to at least trudging muddy/mucky creek water at the river delta. Bottom line: It appears Mr. Meyer is taking the company in a more thoughtful direction with an actual *plan* and moving USS AMD in a more cautious manner than the former ‘skipper’.

      Actually, all of this reminds of yet another “A” computer technology company (“A” in that their name begins with the same letter, not that they’re of “A” caliber). If only Amiga, Inc(and Commodore before that) would have had the smarts to rapidly reorganize and shed their mid-riff management overweight during tough times…

      • MadManOriginal
      • 9 years ago

      They have enough cashflow to pay their debt obligations and are able to find people willing to buy their debt over and over. No net profit means no taxes. *shrug* They’ve been doing it for years so I kind of wonder what would happen if they did actually turn a profit and were like ‘Oh sh*t, you mean we have to pay taxes now?!’ 😀

      • EsotericLord
      • 9 years ago

      Not to mention the sort of troulbe the tech world would be if AMD went under. VIA is basically non-existant at this point.

      Imagine a world of nothing but Intel processors and Nvidia graphics cards. Both companie’s reason to innovate (competition) would vanish.

      Its not that I think this, per say, but I personally wouldnt be surprised if the government or some company was secertly keeping AMD afloat for these very reasons.

    • bdwilcox
    • 9 years ago

    “while its graphics business actually took an 11% dive in revenue compared to the second quarter”
    -Could that possibly be because nVidia launched a competitive product with the 460 and AMD refused to adjust prices accordingly?

    • NeelyCam
    • 9 years ago

    Yet another loss, and an uncompetitive gross margin.

    Some things never change.

      • sschaem
      • 9 years ago

      42->45->46

      Those numbers dont look the same.. and they seem to be incremental.

      At that rate Q4 could be 47 or 48, and if the trend continue (Fusion 2011)
      AMD will be at 54% gross margin at the end of 2011.

      Not Intel… but if a company cant make a profit with a 50+ margin, time to check executives salaries&compensations.

    • crabjokeman
    • 9 years ago

    That dude is a bit scary looking.

      • bdwilcox
      • 9 years ago

      Dirk Meyer? Yeah, he’s a bit ghoulish looking, but absolutely brilliant. He was the main man behind one of the greatest CPU architectures ever, the DEC Alpha 21×64.

    • codedivine
    • 9 years ago

    I am guessing Optimus is eating AMD’s lunch in notebook GPUs.

      • HisDivineShadow
      • 9 years ago

      It should be. Not sure if it is. But that’s the kind of technology that should be in every computer that has a CPU with an integrated GPU. There’s just no reason to be powering your video card ALL THE TIME if your CPU can process the basic video tasks for less power.

      I’m sure AMD’ll have their Optimus response (Megatron perhaps?) pretty soon.

    • ThomasDM
    • 9 years ago

    The numbers are incorrect, the figures listed as “net income” in the table are AMD’s operating income. The net loss attributable to shareholders is $118 million and non-GAAP net income is $108 million.

    • Risme
    • 9 years ago

    Those numbers are in fact operating income, not net income. AMD posted a 118 million net loss this quarter. Might want to check your numbers from the earnings report.

    Considering they gave a profit warning I guess it could have been worse. They are reducing their long term debt by about 180-200 millions per quarter which is good, but I hope they can keep delivering with future products.

    6000 series graphics are launching soon so we’ll know more about them in little bit and Bobcat looks promising by the looks of it. What i’m a little worried about is Bulldozer as it is very critical for their future success and AMD has only given a very vague 2011 launch timeframe for it. Don’t get me wrong, the microarchitecture looks very promising but intel is one seriously tough competitor and they’re launching Sandy Bridge products in Q1 2011. Which means that Bulldozer could possibly compete against Ivy Bridge which is manufactured on 22nm node, but time will tell.

    • djgandy
    • 9 years ago

    Err they posted a loss.

    Your net income table shows operating income.

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