AMD burning cash; announces greater than expected loss

[KenAF]

SUNNYVALE, Calif. July 2 (Reuters) - AMD Inc. (NYSE:AMD - News), a supplier of integrated circuits for networks, on Wednesday anticipated second quarter sales of about $600 million, below earlier guidance of between $620 million and $700 million.

No further details were immediately available. The company's shares dropped 3.72 percent to close at $8.80 on Tuesday.


See the press release right here.

 

[piasabird]

It is a bit of a gamble to build 64 bit processors. For this to pan out there has to be new hardware and software coming out at the same time to support the processor. There probably also needs to be a great 64 bit game out that really requires the 64 bit bus video card. All these things have to come together to make this gamble work. Some nice 64 bit dual processor boards and some 64 bit cad/cam software might help it along.

 

[ToBeMe]

It's right at $8 right now and sliding steadily.🙁 I've been watching this with some vested interest and I'm not liking it..........I'm already at a loss and some anyalists are predicting a bottom of $4 or worse!:| Please AMD..........do something.............

 

[Idoxash]

YES!!!!!!! MS, Intel, AMD, and who ever else i left out!!!! all you need to burn! No need for you media loving selfs! AMD lost me when they stated they will follow intel and ms ways of building stupid media control into cpu/chipsets... no need for such stupid controlds! I shall either move over to apple now or run my pc as far out as i can till the day this earth blows it self up by us no needed humans!

 

[paralazarguer]

piasabird, none of what you said makes any sense. For most applications 64bit computing will be slower than 32bit. "64bit game out that really requires the 64bit bus video card" - that phrase makes no sense. It's jibberish. In fact, the x86-64 architecture is not a true 64bit architecture as even in 64bit applications it will use 32bit word lengths to negate some of the inefficiencies of 64 bit. The myth that 64bit is faster was propogated by the game industry but it's simply not true at this point. It's main benefit is that it can address more than 4GB of memory which is very useful for database management. In today's applications for most users, it's nothing more than marketing I'm afraid. When the Hammer is released in the Athlon encarnation it will be used 99% of the time in 32bit mode and will still show 20-30% more efficiencies over the Athlon XP clock for clock. If you would like to learn more about this architecture I would STRONGLY suggest that you read THIS. as it's clear that you're very misinformed about it.

 

[Pocatello]

How soon will AMD's stock become pennies stock like World Com's?

 

[zippy]

If you would like to learn more about this architecture I would STRONGLY suggest that you read THIS. as it's clear that you're very misinformed about it.

Yes, piasabird, please read that...and don't dispel any more falacies about stuff you clearly have no clue about. :Q

 

[paralazarguer]

Please don't read my technical correction as an indication AMD's stock will drop further. I believe that the Hammer architecture is very promising. It's improved IPC efficiencies, SSE2, larger Cache, HYPERTRANSPORT and SOI are very promising indeed. I only hope that they can increase their clock quickly and quickly include support for dual channel DDR or DDRII

 

[Pocatello]

Certainly the Opteron has a lot of promise, but the way high-tech stocks are going, I wouldn't be surprise if AMD stock dips below $4 at the end of the year. Hopefully, there won't be another corporate scandal from some high-tech company, or any large corporation, that could put the stock markets into another dive.

 

[splice]

This happened before the Athlon came out. AMD's stock was way down and then it shot up over several quarters to the $90+ range, when they started making money and gaining support. It's almost a great time to buy more AMD stock at a great price.

 

[dullard]

Originally posted by: splice
This happened before the Athlon came out. AMD's stock was way down and then it shot up over several quarters to the $90+ range, when they started making money and gaining support. It's almost a great time to buy more AMD stock at a great price.

Lets look at AMD's profit history:
4th quarter 1998: $0.15 per share gain.
1st quarter 1999: $0.88 per share loss.
2nd quarter 1999: $1.10 per share loss. Note if you include the money that AMD made by selling Vantis this turns into a small gain - but that doesn't reflect their processor sales.
3rd quarter 1999: $0.73 per share loss.

Thus there were 3 straight quarters of significantly sized losses (when excluding that one time gain). I'd expect any company to have a bad stock price. Then came Athlon (public availability started in 3rd quarter 1999). AMD raised prices from $213 for their previous top processor to $699 for the 600 MHz Athlon. Notice the more than triple price? With this high price what happened to AMD's profits?

4th quarter 1999: $0.43 per share gain.
1st quarter 2000: $1.15 per share gain.
2nd quarter 2000: $1.21 per share gain.
3rd quarter 2000: $1.18 per share gain.

During that year, AMD's top processor price ranged from $612 to $1299. AMD made a profit with those prices and the stock soared. Then AMD slashed prices and look what happened:

4th quarter 2000: $0.53 per share gain.
1st quarter 2001: $0.37 per share gain.
2nd quarter 2001: $0.05 per share loss.
3rd quarter 2001: $0.54 per share loss.

AMD's profits disappeared when the top processor price was in the $252 to $350 price range. Their stock price plummetted as well. Their losses haven't stopped and look at their top processor release price: $241.

Now lets look at your comment. Before Athlon AMD was losing money, and had a low stock price. Athlon came around and AMD rose prices by as much as 600%. AMD's stock price soared. Now AMD is losing money. Hammer comes around. If history repeats itself AMD needs a huge price increase to start having huge profits and then the stock price will soar once again. In this economy is AMD willing to triple the price again? Are its customers willing to pay that?

 

[grant2]

People who predict a performance decrease in going from 32->64bit computing always concentrate on mathematical operations but never STRING operations. There is a HUGE potential performance increase when you can manipulate strings 8 characters/operation instead of just 4.

Will 64bit run slower than 32bit? There's a large possibility it will, but it's not a foregone conclusion...

 

[ToBeMe]

Originally posted by: splice
This happened before the Athlon came out. AMD's stock was way down and then it shot up over several quarters to the $90+ range, when they started making money and gaining support. It's almost a great time to buy more AMD stock at a great price.

First, these are not the same circumstances and second, as mentioned above, unless Hammer comes out in the $600+ range it's not going to boost the bottom line and that's what people are concentrating on these days. I have AMD stock and will weather this as I really have no choice at this point (bought at $13 a good while back) but Intel is down also and to be honest, I don't see either coming back with Hammer or Prescott in '03 price wise and that will hurt AMD more. It's going to take an ecomnomic boom and a huge boost in PC sales corporate and end user wise for either to gain or be able to boost prices and be able to sell. I'm not looking for much out of either for at least the next 3 Q's but AMD at $4 or below would not be good for them especially...............🙁

 

[JeremyJ83]

I hope that AMD's stock price will go back up in the comming few quarters. However, since I do not own any stock in AMD yet, this would be a good time to buy. I believe you all know, "buy low sell high."

Jeremy