Tag: profits

AMD applies for a loan

AMD is planning to go to the debt markets to raise more than $300 million.

It wants to pay the debt off in 2022.

Some of the cash will be used to repay all, or at least some of the debt it has to pay off this month. It could also be used to pay some of the debts that are due in 2015.

According to ValueWalk, AMD could also use the funds to make cash payments under a revised chip production agreement with GlobalFoundries, back in March.

This revised agreement came about when AMD said it was unhappy with GlobalFoundries’ 32 nanometer process ramp for Opteron server processors, and its 28 nanometer ramp for Fusion hybrid CPU-GPU chips.

This would free up some money for AMD to buy some more companies. AMD already bought SeaMicro for $334 million and might have its eyes on Calxeda, the ARM server processor maker.

It’s rumoured that Applied Micro Circuits could also be a target, as it is working on a multi-core, 64-bit ARMv8 processor for servers, although that might be a bit pricey.

Meanwhile at AMD, John Byrne has just been appointed chief sales officer, he confirmed to ChannelBiz.

Sony continues its slide

Troubled electronics outfit Sony has said that its first-quarter operating profit slid from a year earlier.

The company said that it is suffering from the fact that no one wants its tellies or other devices.

In the three months to 30 June, Sony posted a 77 percent fall in operating profit to $80.27 million. This is well below estimates from Wall Street analysts polled by Reuters

Tragically, Sony needed a significant improvement in its figures. They were supposed to give investors an idea of what Sony’s new boss, Kazuo Hirai, was going to do.

He took over Sony in April, vowing to turnaround the struggling company by spurring profit growth from cameras, gaming and mobile devices.

However it is starting to look like turning around the company is a bit like stopping a rabid elephant from charging over a cliff.

To be fair it is not really his fault. Not only did he inherit a company which needed a bit of work, Sony is particularly vulnerable to the European debt crisis.

Yuuki Sakurai, CEO of Fukoku Capital Management, the asset management unit of Japan’s Fukoku Mutual Life Insurance, said that he was not too worried about the US dollar but it was the Eurozone which was keeping him awake at nights.

He said that Hirai was in a tough position, and he did not envy him.

The incredible evaporating value of the euro hurts all Japanese companies that sell their goods and services in Europe, but Sony is more sensitive to yen swings against the common currency than its local peers.

Sony’s European sales account for a fifth of all revenue compared with a tenth at both Panasonic and Sharp. 

AMD loses top chip man to Nvidia

The man who put AMD chips under the bonnet of the top three consoles has defected to Nvidia.

Bob Feldstein who brokered the deal which saw AMD getting the work for the Xbox 360’s Xenos GPU and the original Wii’s Hollywood GPU has cleaned out his desk and fled.

Feldstein is a long term inmate of AMD and worked for ATI before it was bought by the chipmaker. To say he will be missed is an understatement. It was thanks to his work that of the previous console generation, only the PS3, with its Nvidia-powered RSX, had a GPU designed by a rival firm.

According to the Wall Street Journal, he left AMD on Friday the 13th and started work at Nvidia on July 16th. Apparently he left on “amicable terms” which means that he did not have to be escorted from the building.

AMD said it was his decision to leave and praised his work. Nvidia wouldn’t confirm or deny that Feldstein was hired to try to take the console gaming market back.

Instead it told the Journal that Feldstein would “help us think through current and possible future technology licensing projects”.

Feldstein is the latest in a number of high profile exits from AMD lately. Graphics CTO Eric Demers defected to Qualcomm back in February of this year, and laid off a VP among 1,400 workers in November. SVP Rick Bergman left in September, and former CEO, the comedian Dirk Meyer, resigned last January. 

AMD warns on revenue

AMD has warned that its second quarter revenues will be down about 11 percent from the prior quarter.

It is blaming poor sales in China and Europe as consumers dine from rubbish bins rather than buying new chips.

Such optimism from AMD was clearly infectious and shares have fallen six percent.

AMD had expected that second-quarter revenue would increase three percent from the first quarter.

Alex Gauna of JMP Securities told Reuters sales in China reflect stronger chip updates by rivals Nvidia and Intel. Basically the pair of them had better technology, he claimed.

AMD had been hit by the European economic situation because it had always played in the lower end of the computer market. It is this market where people are not buying.

AMD posted a first-quarter loss of $590 million and is concerned that things could get worse. It is squaring off against Intel’s Ivy Bridge and Chipzilla is getting sales for its recently launched Romley server chip.

Operating expenses for the second quarter will be about eight percent less than prior guidance of $605 million, the company warned.

AMD is due to fess up the full details when it announces its financial results next Thursday. 

Asustek profits plummet

The dark satanic rumour mill has manufactured a hell on earth yarn which claims Asustek is expected to see revenues drop 20 percent in the first quarter of 2012, which is after a pretty grim end of 2011 result.

Digitimes is reporting that Asustek is suffering badly from its dependence on notebooks. The new quarter is normally pretty bad because the company will be hit by the Lunar New Year holidays.

A big problem for Asustek is the erratic European market.

Quoting “market watchers”, Digitimes said that Asustek is poised to see a 10 percent decline in notebook shipments in the first quarter with its tablet PCs and Eee PCs also unlikely to grow either.

One of the only good bits in the Asustek news is that the outfit is expecting to do better out of selling its motherboards than it expected.

Things should start to pick up in the middle of the year when Intel starts selling its Ivy Bridge platform, when notebook demand is expected to rise.

By the time Windows 8 appears in the third quarter notebook shipments should grow. 

Microsoft has a prophecy of 2012 profit loss

Software megalith Microsoft has been consulting the augers and is warning that the liver on its sacrificial lamb is not up to scratch.

As a result, it is seeing a great undoing and a fall of profits in its Windows decision. It seems that the Gods have turned their back on the mighty Vole and cursed the industry with falling PC sales.

Tami Reller, chief financial officer of the Windows unit, told the Guardian  that analysts’ expectations that the PC market had shrunk by a percent were too optimistic and there was nothing but doom to beware of.

To make matters worse, as we reported, Gartner’s tarot card readers and IDC’s gazers at crystal balls are also predicting things to be much worse in 2012.

Some of that will be the result of hard-drive shortages thanks to the floods in Thailand, but mostly it will be the economic crisis in Europe and the US. Of course there will also be the end of the world to look forward to again in December.

But what is worrying analysts is that Windows 8 and Ultrabooks, which are supposed to give the industry a kick start this year, might not impress consumers in such an economic climate. Punters are less likely to choose a new computer when there are more important things to buy out there, such as food.

Apple is saying the opposite of course. It told its analysts to expect bumper revenues from the fourth quarter, driven by strong sales of its iPhone and iPad over Christmas. However, Apple has not made any gains into the PC market, but much like it did with the iPod, copied another technology, marketed it as something new and set its own rules. Intel is trying a similar trick with the Ultrabook. 

AMD about to release another profit warning

The Dark Satanic Rumour Mill has manufactured a hell on earth yarn which claims that AMD is about to announce it’s losing even more money than it thought.

Wall Street analyst Craig Berger, who does the sums for FBR Capital Markets, told IB Times that AMD could guide revenues to fall between four and eight percent in the first part of the year.

AMD will make only $1.62 billion in revenues, which is slightly better than the Street’s $1.60 billion, but still grim.

Berger said that although hard disk drive (HDD) production appears to be recovering faster than initially feared, AMD has been hit by the disruption, and it could hit CPU demand until further HDD productivity happens.

What will tell the full story is when AMD reveals its Llano yields, 28nm ramp timing, and server uptake. He thinks that then gross margins will likely be guided down sequentially.

Berger said that the firm’s strategy is in limbo as CEO Read takes over and assesses the firm’s future in a possible Windows on ARM.

He said that the stock trades very inexpensively but is highly volatile and risky. 

AMD may post lower guidance too

Now that Intel has said that it will not make as much dosh as it expected, thanks mostly to the floods in Thailand, AMD is expected to follow suit.

According to the Street, Wall Street is waiting for an announcement from AMD. Intel blamed the guidance change on a hard disk drive shortage and AMD must also be affected by the same problem.

Patrick Wang, of Evercore Partners, warned that AMD’s situation could even be worse because it flogs a lot of non-brand hardware to people who buy cheap and cheerful gear.

AMD may have to cut its guidance in the next week or two, with disk drive shortages expected to be around for much of 2012. However, the most severe impact will be in the first quarter.

Intel said that its fourth quarter revenues will be between $13.7 billion, which is lower than its original forecast of $14.7 billion. Apparently being a billion short of expectations lead to a fall in shares of five percent.

At the time, AMD shares mirrored Intel’s performance and also fell 4.69 percent.

However, it might not all be bad for AMD. Its biggest customers are HP and Lenovo who claim that its chips have improved their market share. They are not going to change their supplier just because they can’t get enough hard drives. 

Excitable ZTE shows drop in profit

Chinese ZTE – intent on setting up shop in consumer and network infrastructure all over the world – has posted its slightly dented preliminary earnings.

There’s a 12.4 percent net profit drop compared to last year. Its net profit for the first half of 2011 was RMB 767.52 million, or USD $119.57 million.

ZTE claims the drop is because of its bid to flood the world with its equipment and devices – which it calls aggressive – in other words, spreading itself a little too thin.

Other factors didn’t help, like what it says is a change in product structure. It’s also waiting on software VAT refund subsidies.

However, it’s not quite doom and gloom. ZTE is happy with the growth in its international markets, as well as a boost in wireless network products and the smart terminal market, including smartphones. Profit, again, did decline in handsets – but the message it is putting out in the press seems to be that the growth was worth it. 

As expected, ZTE wants to continue mch of what it has been up to – focusing on implementing its wireless networks and broadband networks all over the world. Meanwhile, it highlighted its internal venture capital fund in a statement “to seek growth opportunities”.

In other words if it manages to rake the money in we can expect it to do some shopping. 

“The company will also improve its operating efficiency,” it squawked to investors in the statement, “and strive to contain costs”.

Nintendo puts 3DS in bargain bin

Nintendo has announced that it will be flogging its 3DS devices on the cheap after cutting its profit forecast for the year.

Despite the 3DS’ release to much fanfare, it looked destined for the bargain bin from the start. Nintendo’s profits have been hit due to, in part, woeful sales of the gaming system it wanted as the big seller.

The Japanese company announced that it had recorded losses of $327 million in the three months up until the end of June, with sales dropping 50 percent.

Now Nintendo has been forced to slash its profit forecast for the year, falling 82 percent to $257 million, down from $1.4 billion.

Annual sales targets were hit by 18 percent, dropping to $11.5 billion.

Nintendo will now have to make an extremely embarrassing price drop to recoup losses made on the product .

In fact, Nintendo boss Satoru Iwata has even issued a grovelling apology to customers who have already paid full whack for the device.

“Never in Nintendo’s history have we lowered prices to such an extent, less than half a year since the product launch,” he said in a statement.

“But we have judged that unless we move decisively now, there is a high possibility that we will not see many of our customers enjoying a Nintendo 3DS.”

Nintendo has sold just 710,000 units in the three months up to June, included in the total sales tally of 4.32 million, according to the New York Times.

This was roughly the figure that Nintendo had expected to sell in the first weeks of its release.

But it seems that its portable 3D device was not able to set the world alight in the way other Nintendo products, such as the Wii, have in the past.

It is the glasses-free 3D technology which drew stinging criticism.

As we reported there were huge concerns from parents and even their children over its affect on eye sight, and the nausea that followed a session.  For some, the 3DS is uncomfortable to use almost from the get-go.

It is something of an indictment of 3D technology.

Its various guises in gaming, home viewing and cinema certainly point to the technology being heaped onto the consumer.

The expectation that the technology will serve in itself as a gimmick – rather than as a way of giving a new way to enjoy innovative content – is arguably proving itself.

It was only recently that DreamWorks chief Jeffrey Katzenberg blamed lazy Hollywood’s greed on driving cinema goers away in their droves.

It would be unfair to say that Nintendo has been lazy in its approach to the 3DS, but it does show that the public will not keep on handing over cash purely to be dazzled for five minutes by 3D functionality, followed by half an hour of a migraine. 

In terms of the TV market there is a feeling that 3D is becoming more difficult to market as a unique selling point. It’s not doing the trick like HD or flat panels have in the past.

Of course there are other problems which have hit the 3DS, such as a lack of titles, but we can’t help but feel the jarring use of the much vaunted 3D struggled to match the hype.

The 3DS will retail in the US from $249.99 to $169.99.