AMD has posted operating losses of $296.7 million in Q2 compared with a profit of $21.7 million in the corresponding period last year. AMD made a loss per share of $0.54, which was well above analyst’s expectations of a loss per share of $0.45. The company also experienced a 39.1% drop in revenues compared with Q2 in 2001.
AMD twice lowered its revenue forecasts during Q2. The company had originally expected to post revenues of $820-900 million but only ended up posting revenues of $600.3 million. AMD blamed its poor results on weaker than expected PC sales in key markets such as Europe. The company’s strategy of aggressive price-cutting to compete with Intel has also had a significant effect on the company’s performance in Q2.
Analysts believe that AMD will struggle to return to profitability during Q3. The company has already accepted that it will post a loss in the next quarter, but is hoping that its flash products and PC processors will show signs of sequential growth during Q3.