A backward step
While no company is unaffected by the global recession, it seems that it couldn't have come at a worse time for AMD, which hasn't reported a quarterly profit for nine quarters and was hoping to do so before the end of 2008.
Sadly this wasn't the case as its finances took a backward step in the last quarter of 2008. Yesterday it reported a net loss of $1.424 for the quarter, a figure exacerbated by yet another write down of the ATI acquisition, this time of $622 million. AMD has now written down around $3.4 billion of the original $5.4 billion acquisition.
There was also a $227 million incremental write down of inventory due to weak market conditions.
On top of these write-downs, market conditions also had a big part to play. As recently as last October AMD still hoped to bring in around $1.585 billion in Q4 but the rapidly weakening market resulted in a revenue figure of $1.162 - a sequential decrease of 35 percent and a year-on-year decrease of 33 percent.
For the whole year, ending December 27, 2008, AMD's revenue was $5.808 billion, with a net loss of $3.098 billion. AMD reported revenue of $5.858 billion and a net loss of $3.379 billion for fiscal 2007.
"Although industry visibility is poor, our priorities remain clear and achievable," said Dirk Meyer, AMD's president and CEO. "We remain focused on further reducing our breakeven point through targeted restructuring actions while ensuring we execute our highly-competitive product and technology roadmaps.
The previous revenue figure identified as necessary to achieve quarterly breakeven had been $1.5 billion. As a result of the deterioration in the market AMD had now lowered this to $1.3 billion - hence the further reductions in headcount.
AMD's shares fell by around ten percent yesterday, closing at $2.02, and fell a further 3.47 percent in after hours trading.