AMD counters talk of recovery

Following poor first quarter financial results, AMD has dampened talk of the market having hit the bottom, in an announcement seen as a direct reply to Intel's...

Following poor first quarter financial results, AMD has dampened talk of the market having hit the bottom, in an announcement seen as a direct reply to Intel's more positive assessment of the state of the economy.

Last week Intel's CEO, Paul Otellini, gave cause for cheer with the view that the market had hit the bottom and now would start a recovery.

But AMD's president and CEO, Dirk Meyer, poured a gallon of cold water over those claims pointing out it is too early to say the market had hit the bottom.

"I do not know how anybody can say that we hit bottom given the continued uncertainty that we have in the macroeconomic climate," said Meyer.

"As a result of that, I would say that we are being cautious on our outlook."

Those comments accompanied a poor set of results for its first calendar quarter with net losses of $416m and projections that the second quarter would also be hit by the downturn.

"Considering current macroeconomic conditions, limited visibility and historical seasonal patterns, AMD expects its product company revenue to be down for the second quarter of 2009," said the company in a statement.

Q1 losses come on the heels of a bad Q4.The company took a hit on inventory write-downs and ATI goodwill impairment charges, as well as facing a drop-off in processor sales.

Results for the final three months of 2008 showed a 33% year-on-year fall in revenues to $1.162bn and a loss of $1.424bn, for the year turnover dropped marginally to $5.8bn and losses were $3.09bn.

The losses included $684m charge for ATI impairment of goodwill and acquired intangible assets - reputation, customer base and brand - and $227m for inventory write-downs.

This story first appeared on Microscope.

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