When AMD [NYSE:AMD] posted a negative pre-announce for the second quarter 2012 and cited that they expect 11% fall in revenue, few expected that the company will post a positive income.
Just as we estimated in our story a week ago, in second quarter 2012 Advanced Micro Devices achieved $1.41 billion in revenue. Non-GAAP net income came up to $46 million ($0.06 EPS), while the GAAP (Government Accepted Accountability Practices) net income was reported to the tune of 37 million dollars ($0.05 EPS) on operating income of $77 million.
This is quite encouraging information for AMD, given that the company management was able to reduce its operating expenditures to post a profit in what was a terrible quarter for the company. Missing out on 11% revenue caused investors to send stocks into a freefall, but we expect to see the stock rebounding on encouraging news.
Rory Read, President and CEO stated that the "overall weakness in the global economy, softer consumer spending and lower channel demand for our desktop processors in China and Europe made the closing weeks of the quarter challenging." When it comes to the actual (third) quarter, Rory expects growth; "We are taking definitive steps to improve our performance and correct the issues within our control as we expect headwinds will continue in the third quarter as the industry sets a new baseline. We remain optimistic about our core businesses as well as future opportunities with our competitively differentiated next-generation Accelerated Processor Units (APUs). Our recently launched Trinity APU continues to gain traction with customers. We are committed to driving profitable growth."
Thus, AMD is over and done with the strategy of buying market share and wants to drive the profitability, even if that results in a lower overall revenue. We will follow up with in-depth analysis following the Earnings Investor Call which will start in a few.