AMD loses over $600 million

[SickBeast]

Please don't hurt me, it's the Inquirer!

:Q :Q :Q :Q :Q :Q :Q :Q :Q :Q :Q :Q :Q :Q :Q :Q

If AMD only made $88 million last year during their 'glory days', then this type of loss is monolithic and I can't see them surviving. They're even having to give away their chips. Pathetic.

Why on earth did they buy ATI?

Why didn't they release Barcelona when they had the technology?

Why why why??? I :heart: AMD. Such a shame. :thumbsdown:

 

[erwos]

DailyTech reported the same thing, so it's got nothing to do with The Inq.

Anyways, yes, that's a huge quarterly loss. It's probably not quite as bad as it looks at first glance, but they've got to turn things around in the next couple years. Of course, anyone could have predicted this huge loss - corporate mergers are infamous for producing them.

 

[Ika]

I still don't understand why AMD bought ATi. ATI wasn't even winning in the GPU sector. And so far, nothing's come of it...

 

[apoppin]

http://www.theinquirer.net/default.aspx?article=41042

in contrast:

Nvidia expects a good quarter

Thanks to ATI

AS GRAPHZILLA prepares to report its quarterly earnings this week, shares in the company are up on speculation that it's done rather well for itself in the past few months.

Forbes, the magazine noted for its obsession with money, says that Nvidia is sure to be a good pick after analyst Eric Ross, from ThinkEquity, rated the company a hot "Buy".

. . .

Ross thinks that Nvidia could hit $55 a share before the year is out, up from predictions of $42. That's sure to be welcomed by the boys in California - as DAAMIT struggles to make its share price move a little, Nvidia went up 1.8% yesterday.

 

[smthmlk]

AMD saw that ATI had some decent products lined up (r600) and they had their own vision of fusion and going in new directions (merger announced 7/06). AMD knew intel and nvidia had new stuff coming (G80, 11/06), and knew intels much hyped conroe was pretty good (released 7/06), but that's to be expected coming from the dismal P4 arch. The prospects looked pretty decent at the time, assuming nothing cataclysmic occurred. If things hold up for a while, they could make headway with their fusion ideas and begin to turn a profit with derivative products. Sounds like a sound business move (purchasing ATI). Unfortunately, things did not hold...

Conroe is released in July, and the hype was real. Nvidia releases the G80 four months later after being very tight lipped, and the 8800's dominated. Two bombs dropped, but not all was lost, yet. R600 problems and numerous delays kept AMD from competing for several months on the high-end gpu market, as well as numerous barcelona delays keeping them from competing very well in the cpu market, with continued reports of lackluster performance and low clock speeds dogging any chance for optimism. Throw in a raging price-war with intel slashing profit margins on their k8 cpus and you've got catastrophe on both fronts at the same time.

It's like being dealt a great hand in poker and going all-in on it, knowing that the probability of someone else having a better hand is very small (but it could happen). You take the risk, only to find out that on the flop, your opponents both have better hands than you. IBM buys AMD after two more quarters.

 

[Amaroque]

I would assume that they bought ATI because they want to integrate a graphics core.

Verry bad timing though.

 

[SickBeast]

Originally posted by: smthmlk
AMD saw that ATI had some decent products lined up (r600) and they had their own vision of fusion and going in new directions (merger announced 7/06). AMD knew intel and nvidia had new stuff coming (G80, 11/06), and knew intels much hyped conroe was pretty good (released 7/06), but that's to be expected coming from the dismal P4 arch. The prospects looked pretty decent at the time, assuming nothing cataclysmic occurred. If things hold up for a while, they could make headway with their fusion ideas and begin to turn a profit with derivative products. Sounds like a sound business move (purchasing ATI). Unfortunately, things did not hold...

Conroe is released in July, and the hype was real. Nvidia releases the G80 four months later after being very tight lipped, and the 8800's dominated. Two bombs dropped, but not all was lost, yet. R600 problems and numerous delays kept AMD from competing for several months on the high-end gpu market, as well as numerous barcelona delays keeping them from competing very well in the cpu market, with continued reports of lackluster performance and low clock speeds dogging any chance for optimism. Throw in a raging price-war with intel slashing profit margins on their k8 cpus and you've got catastrophe on both fronts at the same time.

It's like being dealt a great hand in poker and going all-in on it, knowing that the probability of someone else having a better hand is very small (but it could happen). You take the risk, only to find out that on the flop, your opponents both have better hands than you. IBM buys AMD after two more quarters.

Nice post.

People are suggesting Samsung will buy them. IMO IBM makes more sense though.

Barcelona is make or break for AMD. My curiousity is: What will happen to AMD if Barcelona is 'just ok'? As in, if it sorta matches what intel is selling, instead of beating it, and gets a luke-warm reception in the channel.

I just can't see AMD surviving if they don't completely turn things around *fast*.

 

[SickBeast]

Originally posted by: Amaroque
I would assume that they bought ATI because they want to integrate a graphics core.

Verry bad timing though.

Yeah well if they go broke before they can produce Fusion, look forward to intel graphics built into a CPU...not good in other words.

 

[Amaroque]

True, but their will always be discreet graphics. For the next few years, at least.

I don?t want AMD to disappear, but my new builds are C2D's rite now.

 

[WaTaGuMp]

I wonder how many people are getting fired right and left like engineers etc.

 

[smthmlk]

Originally posted by: SickBeast
I just can't see AMD surviving if they don't completely turn things around *fast*.

Unfortunately, it takes a few years to turn yourself around in the cpu market as Intel so recently demonstrated. We're seeing more and more reports that AMD's hopes and dreams (barcelona) just won't deliver, at least not initially. Couple that with the fact that intel isn't sitting on their c2d & c2q successes twiddling their thumbs, and you've got a pretty dismal future for AMD's cpu business, regardless of the casualties mounting on their video side (which, despite my brief description, isn't nearly as dire ).

Lets hope for barcelona clocks to jump up quickly after their release and no more delays!

 

[CTho9305]

Topic Title: AMD loses over $600 million
Topic Summary: Doesn't look good...

...and yet the stock price is up almost 5% in after hours trading

 

[Miramonti]

Like most of us, I cheer for AMD, but like many of us as well, I'm getting an intel conroe next week.

I think 2007 could be the knockout blow to AMD, particularly when intel goes to 45nm and steals barcelona's thunder later this year...and 2008 could be their funeral.

 

[SickBeast]

Originally posted by: CTho9305

Topic Title: AMD loses over $600 million
Topic Summary: Doesn't look good...

...and yet the stock price is up almost 5% in after hours trading

Aren't you that guy who works for AMD? Didn't you sorta subtlely 'predict' AMD's current tough situation back in the day when we were all speculating about Barcelona?

Tell us everything you know! :Q :Q :Q :Q :Q :Q :Q

Maybe the AMD takeover rumours are true...usually when a company goes up in value after hours like this it involves a merger/acquisition, especially in light of AMD's poor financial results.

Seeing as they are going up in value, the suitor would have to be big. Samsung or IBM are my guesses.

 

[sayNOtoFSB]

Originally posted by: CTho9305

Topic Title: AMD loses over $600 million
Topic Summary: Doesn't look good...

...and yet the stock price is up almost 5% in after hours trading

Most of those are buy to cover (shorts). Traders expected downtrend for the last week and this week (hoping for dooms day). But to their surprise AMD maneuverd couple of moves (Germany coming to rescue being one) and then AMD reported better than expected (gained back some margin lost to Intel, and had some growth in the quarter) All and all it was not as gloomy as the short sellers expected and had to cover their loss buying to cover. Usually after hr activities is to buy to cover shorts (and they lost big time). Wait till next week (starting this Friday amid noon) the stock will decline to $12 or below it.
Very bad news for AMD. I think it's time to kick Hector out the door.

 

[jpeyton]

This shouldn't have been a surprise to anyone; everyone from Wall Street to the forums was predicting a loss of this magnitude. Not as many would have predicted the better than expected gain in revenue.

Barca will basically set the tone for the company over the next year, and investors will hold tight until the launch to see how it plays out. If it gets a warm reception from the server/workstation/HPC crowd (like the Opteron), AMD will slowly cut its losses over the next year.

If the reception is cold, look at buyout rumors to intensify towards the end of the year. I'm not the only person who thinks IBM+AMD would be a great thing.

 

[CTho9305]

Originally posted by: SickBeast

Originally posted by: CTho9305

Topic Title: AMD loses over $600 million
Topic Summary: Doesn't look good...

...and yet the stock price is up almost 5% in after hours trading

Aren't you that guy who works for AMD? Didn't you sorta subtlely 'predict' AMD's current tough situation back in the day when we were all speculating about Barcelona?

I do work for AMD, but I try not to post things that people are likely to read as speculations. I know some of you are going to examine every word I write looking for extra meaning, so I end up just not posting in a lot of threads. I searched through my posts but didn't find any predicting that (unless I didn't mention barcelona/k10/k8l in it and it was old enough to be in the archived threads or I suck at searching) so you might be thinking of someone else.

 

[AllGamer]

I cheer for AMD and ATI, but when it comes down to buying what is hot out there, i buy what i need for my use.

I seriously look forward to the new AMD+ATI core CPU whatever they're gonna call that "Fusion" but it got to be better that what is on the market for my next upgrade. having more opponents on the poker table is better for us the consumer in the long run, look at the offering and prices now in days, back in the days, what we've got now in days will cost us over $10k, now just a fraction of that.

Intel graphic never worked well for us the "Gamer" types, nVidia offerings are "ok" but it doesn't have what i need. ATI always offered what i wanted, but now that ATI is in AMD's hand its future is uncertain.... it all comes down to how AMD is going to play its next few hands, is AMD going to fold, or wait for the next hand, and deal in.

having Samsung backing up AMD, in case AMD run out of chips in the table, doesn't sounds all that bad, Samsung is huge, if Samsung really buys out AMD, the it also means Samsung will get 2 for 1 deal, AMD+ATI

with that on Samsung's deck of cards, they can play anything, they'll have a Royal Hand

-Consumer Electronics (TV, dvd player/recorder, VCR, mp3, cd player, home audio, car audio, microwave, satellite stuff, kitchen stuff, fridge, etc)
-RAM
-cache chips (and all other computer related memory)
-LCD
-CPU (AMD)
-GPU (ATI)
-HDD
-FDD
-Flash Memory (SD, MMC, pen drive, etc)
-DVD/RW
-computer peripheral (mouse/keyboard, etc)
- and much much more.

So yeah the future looks.... "Monopoly" if Samsung is to take over AMD/ATI

that will be one heck of a poker deck there, Samsung can be a 1 man Team, is going to be pretty much like Rambo a la Die-Hard vs. Terminator (nvidia) vs. Predator (intel)

That sure will be one heck of a good fight on that poker table

 

[SickBeast]

Originally posted by: CTho9305

Originally posted by: SickBeast

Originally posted by: CTho9305

Topic Title: AMD loses over $600 million
Topic Summary: Doesn't look good...

...and yet the stock price is up almost 5% in after hours trading

Aren't you that guy who works for AMD? Didn't you sorta subtlely 'predict' AMD's current tough situation back in the day when we were all speculating about Barcelona?

I do work for AMD, but I try not to post things that people are likely to read as speculations. I know some of you are going to examine every word I write looking for extra meaning, so I end up just not posting in a lot of threads. I searched through my posts but didn't find any predicting that (unless I didn't mention barcelona/k10/k8l in it and it was old enough to be in the archived threads or I suck at searching) so you might be thinking of someone else.

It was very subtle. You didn't directly say anything. Perhaps I read too much into the tone of your post.

 

[Tboy012]

Originally posted by: AllGamer

that will be one heck of a poker deck there, Samsung can be a 1 man Team, is going to be pretty much like Rambo a la Die-Hard vs. Terminator (nvidia) vs. Predator (intel)

terminator and predator just sounds unbeating in terms of comparing them to die-hard and rambo...

 

[AllGamer]

not exactly... both Terminator (android) and Predator (alien) were both beaten in the movies, but Rambo (or die hard) always manages to survive all the destruction mayhem LOL

 

[aigomorla]

Originally posted by: CTho9305

Topic Title: AMD loses over $600 million
Topic Summary: Doesn't look good...

...and yet the stock price is up almost 5% in after hours trading

i would assume thats becuase of the rumor that samsung might come in and bail them out.

If thats the case, you can make a hugh money off stocks if AMD gets bought out.

And if its only a rumor, and they dont get bought out. I can see AMD falling even more, and a lot of people losing tons of money.

 

[SickBeast]

Originally posted by: aigomorla

Originally posted by: CTho9305

Topic Title: AMD loses over $600 million
Topic Summary: Doesn't look good...

...and yet the stock price is up almost 5% in after hours trading

i would assume thats becuase of the rumor that samsung might come in and bail them out.

If thats the case, you can make a hugh money off stocks if AMD gets bought out.

And if its only a rumor, and they dont get bought out. I can see AMD falling even more, and a lot of people losing tons of money.

Yeah it's a risk, but one that might seriously pay off. I just read a letter on the inquirer that made it sound like he had some insider information that Samsung *will* buy AMD, and this will in turn crush intel. He said something about intel starting to sell off their memory operations.

That said, most of the time companies that are taken over jump maybe 10-20% in value the day they are bought out. That's a good amount of money, but considering you are risking losing everything with AMD, I'm not sure that I would do it (and in fact I don't plan to).

 

[aka1nas]

Originally posted by: SickBeast
[

People are suggesting Samsung will buy them. IMO IBM makes more sense though.

I'm not sure AMD has anything IBM wants. They already co-develop most of AMDs process technology with them. I doubt they want to get into the commodity x86 space and they haven't ever shown interest in the graphics market AFAIK. What else does AMD have left? They sold off their flash business a few years ago, right?

 

[madh83]

Did any of you check where the 600 million dollar loss comes from? They might have just split their acquisition costs of ATI over a few quarters as creative accountants tend to do, not to mention mergers usually tend to have a lasting negative effect on operating costs for several quarters forward. It's really not as a big a deal as it is being made out to be. With that said, I definitely agree that they probably should not have acquired ATI in the first place. Especially if it was just for integrated graphics.