AMD sees reversal of fortunes ahead in third quarter after weak Q2 earnings
Advanced Micro Devices (AMD) hopes to turn around its financial struggles in the third quarter, saying it will record significant revenue growth and return to profit after reporting a loss and drop in revenue during the second quarter.
"Looking ahead, we will continue to deliver a strong value proposition to our established customers and also reach new customers as we diversify our business. We expect significant revenue growth and a return to profitability in the third quarter," said AMD CEO Rory Read in a statement.
AMD on Thursday reported revenue of $1.16 billion (€882 million) for the second quarter of 2013, which ended June 29, a drop from the $1.41 billion (€1.07 billion) recorded during the same quarter last year. Including one-time charges, the company reported a net loss of $65 million (€49.5 million), or a $0.09 loss per share.
For the third quarter, AMD expects revenue to increase on a sequential basis by 22%, plus or minus 3%.
Second-quarter revenue from the company’s Computing Solutions segment, which deals in microprocessors, was $841 million, decreasing 20% compared to the same quarter the previous year. Revenue for Graphics and Visual Solutions, which deals in graphics chips, was $367 million, declining by 13% year over year.
The company has been diversifying its business outside the slowing PC market. Its chips will be used in Microsoft’s Xbox One and Sony’s PlayStation 4 gaming consoles, which will ship later this year. AMD last quarter formed a new custom-chip business unit to make processors designed specifically to device requirements.
AMD in the second quarter also introduced new PC chips, which will sell in larger volumes during the third quarter. AMD introduced its first ARM-based server chips, which will ship in the second half of 2014.
IDG News Service