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Despite rough second quarter, AMD manages to post profit

Advanced Micro Devices managed to make a $46 million (£29 million) profit in a rough second quarter that saw revenue decrease by double digits both sequentially and year-over-year, the company has reported.

AMD had warned that sales would be down for the quarter and its revenue of $1.41 billion (£898 million) was a 10 per cent decline from the $1.57 billion (£1 billion) the company pulled in for the same quarter a year ago, when it posted profits of $105 million (£67 million). The chip manufacturer had sales of $1.59 billion (£1 billion) in the first quarter of 2012 but that period was marked by a loss of $580 million (£375 million).

"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. 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," AMD president and CEO Rory Read said in a statement.

"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," he added.

In the second quarter, AMD introduced its both its Trinity chips for ultrathin laptops, which succeed the first-generation Llano APUs, and mainstream notebook processors codenamed Brazos 2.0, securing design wins from Hewlett-Packard, Lenovo, Samsung, Toshiba, Asus, Acer, and other computer manufacturers.

The company launched its most powerful discrete graphics processor for desktops to date, the Radeon HD 7970 GHz Edition, and brought a series of next-generation Radeon mobile GPUs to the laptop market.

AMD also made news in the second quarter with a new strategic partnership with ARM and the formation of the HSA Foundation with ARM, Imagination Technologies, MediaTek, and Texas Instruments to push open standards for heterogeneous computing.

"AMD had a market softness in consumer notebooks, market softness in China, and Llano desktop transition issues in the channel. AMD is much more reliant on the desktop channel and the consumer market, which only exacerbated the situation," said Patrick Moorhead, principal analyst at Moor Insights & Strategies.

"In the third quarter, Trinity will provide a boost in higher-priced notebooks, but desktop channel management in the shift between Llano to Trinity will be challenging. The fourth quarter should be much smoother sailing as Windows 8 will have launched and major transitions should be complete," he added.