Advanced Micro Devices reported a first quarter net loss of $416 million, or 66 cents a share, on revenue of $1.17 billion, down 21 percent from a year ago. However, CEO Dirk Meyer said Tuesday that AMD is "more nimble" following the spin-off of its manufacturing assets, but the company projects revenue to slide in the seasonally slow second quarter.
Even though AMD's quarter was tough it still managed to beat Wall Street's low expectations. The company's net loss (statement) included a charge of 4 cents a share. Excluding that charge, AMD topped estimates by 4 cents. The first quarter for AMD was about burning off inventory that was built for demand that never arrived.
The company has consolidated GlobalFoundries, the manufacturing joint venture, in its results but referred to AMD "the product company" as the chip design outfit. AMD's chip design and product business had a net loss of $189 million.
Like its much larger rival Intel, AMD forecasted some balance in supply and demand. "The severe inventory corrections of the last quarter have stabilized," said Meyer on a conference call with analysts. Meyer stopped short of calling the bottom like Intel has, adding that "I don't know how anyone can do that."
Meyer said customers are only buying the processing power they need. Notice AMD's plan: It is pitching itself as a value chip maker and hinting that Intel gives you more processor than you need. He touted AMD's Yukon and Congo platforms, which target light notebooks.
CFO Bob Rivet added that AMD saw some demand in the first quarter from value buyers. Nevertheless, Rivet said that second quarter revenue will decline from the first quarter for AMD. AMD hopes to be cash flow positive in the second half of the year.
However, AMD is still going to have a tough time. Meyer was asked about Intel's launch of chips for the light, thin notebook market. Meyer said AMD wasn't planning to cede market share, but noted the second quarter was "murky at best." Meyer said that Intel's CLUV move was in response to AMD's move.
Here's a look at how AMD's first quarter stacked up: