Dockery

Custom mounting man, customing mounting.

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NrGx

AMD is going to announce their insolvency soon enough. Consider this: Nvidia's revenue is as positive as the entire AMD company's is negative.

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Q9550 @ 4.0GHz

003

Yes. ATI Technologies no longer exists as a corporation, it became defunct in 2006 when it was acquired by AMD. Only the brand name is left. All financials are counted as one.

AMD was posting losses before they acquired ATI. Being green next quarter, or for the next 10 quarters, will only be a small drop in the bucket. Many people don't seem to understand just how deep of a hole AMD is in. As of 2008, AMD's assets were collectively worth 7.5 billion dollars in the red. People seem to be unwilling to comprehend just how atrociously bad that is.

The reasons (acquisition of ATI) are irrelevant. 7.5 billion dollars of debt is 7.5 billion dollars of debt, and the inconvenient truth is that this is their 14th consecutive quarter with a posted loss.

Just to put things in perspective, AMD's third quarter results are 74 million earned off their CPU division and 2 million off their GPU division. That is quite literally, virtually nothing.

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I called it!

r4zr

As to whether or not the 5000 series is included in this, its a mixed bag. Any deals that were inked in the quarter are, those that weren't aren't. So there will definitely be Q4 growth in that division.

As far as the insane amounts of debt: insolvency and illiquidity are two very different things. Corporate valuation doesn't give a damn about debt load, provided that the company can service it. Currently AMD has been servicing its debt with more debt. Bad. However, once the company goes back into the black and stays there, the valuation models will ONLY look at free cash flow (FCF). Since the purpose of a corporation is to provide wealth to it's owners, only long term FCF matters. The real question as to whether or not the company will succeed is whether they can convince their stockholders that they will be able to stay in the black from here on out, and then actually do it. Remember, the profits listed are those after making payments on their current debt.

Source: A degree in finance.

Edit: Typos

NrGx

r4zr, you make some good point. The problem is that AMD hasn't been in the black for almost 2 years now. The ability to finance your debts with more debt is contingent on the ability to acquire that debt. There will come a point where the bank will say to AMD 'Look, come back when you start making profits again'.

The FCF argument is a good one though.

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Q9550 @ 4.0GHz

Laforet

Nah, Intel will do anything to keep AMD afloat, or face all the anti-trust silliness in the US, not to mention they have already been slammed by the EU.
nVidia is in for bigger trouble if GT300 gamble turns out sour next year

Oupavoc

Where's the source?

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Oup <°)))><™

Cheetos316

I wonder if revenues from GlobalFoundries is included. Since AMD owns a bit more than a third of GF, does that mean they get a bit more than a third of its revenues? With GF getting more clients, that should mean more revenue for AMD too.

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Gen

I thought they were now only ~5 billion in the hole, which is really not that bad considering the position they were in with the first generation Phenoms.

Good point, I'd like to know this too...

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We Are The Red Tide

vicious_fishes

so the result of all this is, they're not yet making enough money to pay off their liabilities each quarter, so the debt is gradually getting larger ?

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