AMD's third-quarter financial results are in, and they've arrived with a side order of pink slips. The firm recorded a net loss of $157 million on revenue of $1.27 billion. Those numbers are both worse than the previous quarter and worse than Q3 a year ago. AMD's saw revenue decline for both its Computing Solutions and Graphics divisions. Interestingly, though, the average selling price was down for CPUs but up for graphics processors.
Overall, AMD's gross margin was just 31%, a steep decline from the 45% it enjoyed both last quarter and in Q3 a year ago. The company identified a $100 million inventory write-down, made up of mostly Llano-based A-Series APUs, as a contributing factor for the drop. It also cited weaker demand for its microprocessors as a culprit.
In the coming quarter, AMD intends to axe 15% of its work force in a bid to lower costs. The firm projects the cuts will lead to $20 million in savings for Q4 and $190 million in 2013 as a whole, the company says. However, AMD also expects to incur a restructuring cost of around $80 million.
The official press release doesn't reveal specifics about the restructuring plan or whether engineering positions will be disproportionally affected, as rumored last week. Here's what CEO Rory Read had to say:
It is clear that the trends we knew would re-shape the industry are happening at a much faster pace than we anticipated. As a result, we must accelerate our strategic initiatives to position AMD to take advantage of these shifts and put in place a lower cost business model. Our restructuring efforts are designed to simplify our product development cycles, reduce our breakeven point and enable us to fund differentiated product roadmaps and strategic breakaway opportunities.
Intel seems to be doing a better job of following those trends—and of enduring the weak overall economic environment. The chip giant announced largely flat Q3 results a couple of days ago, but it still reported $3 billion in profit off revenue of $13.5 billion—with a gross margin over 63%.