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Advanced Micro Devices said that the global macroeconomic situation has clearly affected sales of personal computers and hence AMD's revenues. In addition, AMD noted lower channel demand for its desktop A-series "Llano" accelerated processing units in China and Europe due to lack of mainboards. The company indicates that both macroeconomic challenges and issues with the channel will continue to affect it materially in the coming quarter.

"It is clear that global economic activity is slowing, and this is impacting the PC market. For the first time since 2001, client PC shipments have declined sequentially for three consecutive quarters and have been below historical averages for the last seven quarters. We expect macro headwinds will continue for the third quarter. We also believe the PC industry may be resetting to a new baseline and that full year industry growth estimates will be reduced," said Rory Read, chief executive officer of AMD, during conference call with financial analysts.

AMD today announced revenue for the second quarter of 2012 of $1.41 billion, down 11% sequentially, net income of $37 million, or $0.05 per share, and operating income of $77 million.

Computing solutions segment - which includes sales of APUs, CPUs and chipsets - revenue was $1.05 billion, down 13% sequentially driven primarily by lower channel sales in China and Europe as well as a weaker consumer buying environment impacting sales to OEMs. Client product revenue declined 13% sequentially primarily due to a lower ASP as well as declines in unit sales of A-series "Llano" APUs as the company has failed to ensure proper supply of FM1 mainboards into the channel as it had concentrated on shipments to OEMs till early this year. Therefore, when it started to ship Fusion "Llano" into the channel, the demand was weak due to low availability of mainboards. Unit shipments of AMD Opteron processors for servers also dropped quarter-over-quarter. Computing solutions operating income was $82 million, down $42 million from the previous quarter.

Graphics segment revenue was $367 million, seasonally down 4% compared to the prior quarter. GPU revenue was down in a seasonally down quarter due to lower unit shipments in the channel and game console royalty revenue was flat compared to the prior quarter. GPU ASP was flat compared to the prior quarter. Graphics segment operating income was $31 million, down $3 million from the prior quarter primarily due to the seasonal decline in revenue.

“We are taking definitive steps to improve our performance and correct the issues within our control as we expect headwinds will continue in the third quarter as the industry sets a new baseline. We remain optimistic about our core businesses as well as future opportunities with our competitively differentiated next-generation accelerated processor units (APUs). Our recently launched Trinity APU continues to gain traction with customers. We are committed to driving profitable growth," said Mr. Read.

AMD expects revenue for Q3 2011 to decrease 1% sequentially, +/- 3%. The company expects gross margin to be approximately 44%. Operating expenses are expected to be approximately $560 million.

Tags: AMD, Llano, Fusion, Trinity, 32nm, Opteron, Bulldozer, Business

Discussion

Comments currently: 12
Discussion started: 07/19/12 11:42:33 PM
Latest comment: 07/20/12 10:07:22 PM
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0 4 [Posted by: TAViX  | Date: 07/19/12 11:42:33 PM]
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Besides, Llano is still more expensive than a good old Athlon II + discrete or a Pentium + discrete. Llano would be in a competitive position if it consumed less, but in truth is as power hungry and slower than a Pentium + discrete so why would people buy them?
Add insult to injury they're delaying desktop Trinity in order to clear inventory of Llano, that no one buys.
I bought a PhII 955 for a friend that needed a CPU for about 100$ for visualization / soft development as Intel disables VT for Pentiums. I was very surprised to see the mark "Copyright AMD 2008" on the CPU - in 4 years they haven't managed to release something faster for desktop. 700M transistors on 32nm should be cheap and PhII's speed is comparable to Core Pentium - if they were to build a 65W 32nm PhII at least they'd sell something.

/end rant, back to work
0 1 [Posted by: dragosmp  | Date: 07/20/12 01:08:58 AM]
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The "copyright 2008" applies to the CPU naming... not the design.

AMD has sold well over 30 Million APUs in the past two years in addition to many millions of CPUs. They even make money doing so. People should educate themselves instead of hating - which changes nothing.
3 2 [Posted by: beenthere  | Date: 07/20/12 06:40:02 AM]
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Who cares that AMD sold 30 million APUs. Still APUs gets beaten by an Intel i3 processor on performance. For price Intel's Pentium beats APUs. This means AMDs APU just suck. Actually who bought the APUs anyway. Probably a computer manufacture. They have to take the loss if APUs are not selling.
0 0 [Posted by: tecknurd  | Date: 07/20/12 06:39:43 PM]
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Intel Core I3 is trashing any AMD processor atm

A i3 is not beating a 8150 thank you very much.
4 0 [Posted by: veli05  | Date: 07/20/12 06:37:01 AM]
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2. 
Typical of AMD that they would misjudge their lack of fast CPUs. How can you deduce that because your product is selling badly, it is because of consumer spending issues in the marketplace? Do you really believe you can sell whatever you want in the market if the "macroeconomic situation" was good? Your CPUs are slow and everybody knows it. It is time to end for these companies of cynical profiteering.
0 0 [Posted by: TeemuMilto  | Date: 07/20/12 08:08:10 AM]
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0 3 [Posted by: Azazel  | Date: 07/20/12 10:51:54 AM]
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Rory should of just force AMD engineers to work harder to develop the so called "APU" and Bulldozer to at least equal the performance of Intel processors. Rory did nothing to make it happen. Rory only prefers to be illusional by saying just do OK. Doing OK in an 80x86 processor business makes the company go out of business or call it quits. Maybe doing OK work in ARM processor business, but these days that too looks as cut-throat as 80x86 processor business.

Probably Dirk Meyer was probably a better choice, but what do I know. Ruiz just put AMD in debt by giving away computers to the poor. At the time AMD did not have money to buy ATI, but they did buy it. I do not think it is the wrong deal, but AMD just have take money from credit to buy ATI and not able to pay it off for a long time.
0 0 [Posted by: tecknurd  | Date: 07/20/12 07:22:08 PM]
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0 5 [Posted by: Azazel  | Date: 07/20/12 10:07:22 PM]
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4. 
Let us see here. Mr Reed is saying that for the overall losses is caused by slow economics. This is not true. The K7 processor did very well in its time. Also the K8 processor did well very well in its time. The bad marketing team did nothing to embrace how these two processors did during their times. Also the arrogance of AMD during those times and still till this day is causing AMD's CPU business get worst as years past. Until Mr. Read understands his statement that AMD can not compete against Intel based on performance is wrong, only then AMD is able get their CPU business up again. Really blaming APU poor profits on not enough FM1 motherboards is just wrong. There are more to it than that. The cost of a complete APU based build is more expensive than a non-APU build. Actually I can get more with my money to go with a non-APU build. Though the name APU is just a poor name because doing a search at newegg.com does not bring up APUs. To many people treat APU as different, so AMD should just call it a CPU with built-in graphics and stop with the APU business crap. Intel keeps things simple and state their i-series processors as CPU when their processors has built-in graphics. Did anybody give a damn when ATI called their graphics chips as VPU. The answer to that is nope, so people still call it a graphic processing unit like every other graphics processing units.

If Mr. Read is going to be optimistic about Trinity, next APU generation, the processor performance better be at least 50% faster than it previous processor generation. A 2X performance will be more like it because it will put AMD back on the map again. This means AMD have to compete at the same level as Intel because that is the way the 80x86 processor business works. If AMD can not do that, AMD should just call it quits just like Via did for their 80x86 line of processors.
0 1 [Posted by: tecknurd  | Date: 07/20/12 06:57:13 PM]
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