Following a horrible quarter and market share losses, Advanced Micro Devices Inc. (AMD) is within two quarters of running out of cash, according to an analyst.
''While the company's two preannouncements took away any surprise on the revenue line, margins and profitability were still materially worse than expected,'' said Chris Caso, an analyst with FBR, in a report. ''In addition, AMD lost approximately $883 million in free cash flow in the quarter, worse than expected, and putting the company within two quarters of running out of cash.''
This is not good news but, I dont believe AMD is going anywhere in the near future!
In an Apples & Oranges comparison, look at the Airline Industry.
Most airlines have been operating in the RED for several yrs now and several have filed for bankruptcy, some TWICE!
They are still around and starting to make money again!
These may be hard times for AMD but I believe things will get better!
From what I've read about the new ATI Graphics cards they should be back on top at least for a while!
Me personally, I will always buy AMD!
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If AMD goes under, then Intel is in trouble.
1. They will be a de-facto monopoly IF and only IF AMD's bankruptcy drives them completely out of the CPU business
2. Same applies to graphics cards
3. No competition = no incentive to control costs or innovate in the future
4. You have to question the possibility of Intel using anti-competitive practices. While no judgment can be made until the investigations are complete, Intel is so much larger than AMD that I wouldn't be surprised if there were a few secret deals in the past that hurt AMD.
I think it is just another analyst to focused on the numbers to notice the rest of the story.
Did ya know ATI hasn't released a high end card since the x1900 series launch back on January 2006, with the sole exception being the x1950XTX refresh? That is a very long time. AMD hasn't released a new CPU design since K8 either.
So R600 and K10 are both set to launch by the middle of this year, just three months, and both ATI and AMD should be regaining the top performance leader in their markets. If their hardware makes a big splash it could very well lead to a large rebound within the company. But even if for some reason this does not happen, there is no way AMD/ATI would run out of cash with both product launches just around the corner, and it is just silly to think they would.
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Mad_Goku wrote:well I'm sure if worse cames to worse they would consider selling the graphics card unit (ATI).
The only reason all of this about AMD's finances is occuring in the first place is because they stretched themselves thin to buy out ATI. This would be pretty self defeating... especially since ATI turned a profit last quarter, even if AMD didn't.
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I have a feeling AMD will be just fine, correct me if i am wrong but didnt Ford motors report a loss of $12.7 billion for 2006? Its all how these people crunch the numbers.
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looks like AMD plans to issue $1.8 billion in new senior bonds.
trying to stay afloat for a while, hopeing for something( intel mistake?, some new chip?, a miracle?) to save them.