AMD and the Q4 Temple of Doom
by John Paczkowski
Posted on January 23, 2009 at 8:15 AM PT
We have gone through a very difficult time, reacted quickly and decisively, and we are on our way to really have, I believe, a phenomenal transition year in 2008.”
– AMD CEO Hector Ruiz, December 2007
2008 hasn’t quite proven to be the “phenomenal transition year” AMD believed it would be. Despite new leadership and a restructuring of its manufacturing assets, the company was not able to return to profitability by the third quarter of 2008 as it had hoped. And now, AMD (AMD) has reported a greater-than-expected net loss for the fourth quarter of 2008–its ninth consecutive one. A grotesque 33 percent drop in revenue left the company awash in $1.4 billion of red ink.
“The fourth quarter of 2008 is going to be remembered for the severe stresses placed on the global economy and on our industry,” AMD CEO Dirk Meyer told analysts. “The global economic environment led to a softening in end-customer demand for PCs and servers in what is usually the year’s strongest quarter. The reality of today’s global economy require that we redouble our focus on cash management and cash flow control, and we will do so while protecting assets.”
Suffice to say, AMD did not offer a specific forecast for its current quarter, saying only that it expects sales to continue to trend lower “in light of the current macroeconomic conditions, very limited visibility and continued corrections in the supply chain.” Shares in the company, which have lost more than 50 percent of their value since the start of the fourth quarter, closed down nearly 10 percent on the news, although they seem to be recovering today.
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Comments
I love amd, and I am a long time AMD fan. But I must say, considering all the other “Bad” new happening, and the Massive number of continued Layoff’s, Over 73k in January so far, and Record numbers of new unemployment cases still being filed in the us. More than 580,000 Cases Filed Per Week!
With numbers like these, and not end in sight, I would have to say the outlook is less than Dim.
With numbers like these, and I have not hear of anything that has changed, nor going to change the situation, The numbers will just get worse.
For AMD, this will mean, once again, Record Losses. the 1st Quarter is not going to be any better than the last quarter.
And I don’t care how diligent they are at looking at their “Cash Flow, and Cash Management” they only thing they are going to see is how quickly it “Leave” and none is coming in to replace it!!!…
I do love AMD ( Except their whole “PR” rating thing they invented to make their stuff look better, when it was not).
And I want them to succeed.
I hated Intel for the “underhanded” tings it was doing to keep manufacturers from Selling AMD systems. And I will stand by them for that…
But there is only one way this is all headed…And I can’t think of any way to save it.
Unless jobs can be created, and money put into the hands of people, so they can get back to buying new systems, or for upgrades, Its all Doom and Gloom, I am afraid.
I Liked the idea of “Selling” off the fabs, and making them separate entities… this helps keep some of the Ink from looking as bad….But please, keep in mind, that is a double edged sword…
If those Entities can not prove to be “Profitable” and their plans can not show the reasonable expectation to be profitable… ( and lets face it, you would not be splitting them off, if they did not look like some cancerous sore)…
There could Just be the possibility of them being “Forced” to close down, and then Leave you Fab less, Alright!!!..
So please be careful. I do love you guys. But I don’t know what will help!
Posted by gary cotugno at January 24th, 2009 at 12:39 am