Advanced Micro Devices, the world’s No. 2 supplier of x86 central processing units, said that it would return to profitability by the end of the year. For AMD, it will almost be hitting a milestone, as the company last time reported profit in the third quarter of 2006, almost three years ago. However, not everything is that good.
“On the assumption we return to at least nominal seasonality from a growth perspective, we'll be in good shape to leave this year with a profit and free cash flow. I'm hopeful things will stabilize and we'll see a resumption of growth in the back half of the year,” said Dirk Meyer, chief executive officer and president of AMD, at the Reuters Global Technology Summit in New York.
While Mr. Meyer indicated that AMD's main division would end the year profitable and with positive free cash flow if the PC market, as it traditionally happens, improves in the second half from the first; AMD did clarify that Globalfoundries, manufacturing joint-venture between AMD and Advanced Technology Investment Company from Abu Dhabi, which results are consolidated with AMD’s will not be profitable and the combined report will also not show income.
AMD badly needs to return to profitability as continued losses affect the company’s ability to invest into new technologies and hence deliver highly-competitive graphics and microprocessor products.
Recently the European Commission fined Intel Corp., AMD’s arch-rival, for illegal business practices and prevention of competition on the market of x86 chips for $1.44billion. While this is a positive news for AMD, it will hardly help the company to improve sales of all of its products. Still, in future AMD hopes to boost its sales.
“Over time, it's going to allow us to more successfully compete for business,” Mr. Meyer claimed.