SAN FRANCISCOŚRory Read, president and CEO of Advanced Micro Devices Inc. (AMD), said Tuesday (Jan. 22) that the company continues to make progress on its strategy for returning to profitability after the company reported fourth quarter sales that beat analysts' expectations but said it expects first quarter sales to be below estimates.
"We made progress in the fourth quarter delivering on our commitments, managing expense and cash, and beginning to transform AMD for long term growth and profitability," Read told analysts on a conference call following the fourth quarter report. Read said AMD increased its cash flow, reduced excess inventory and lowered operating expenses in the fourth quarter "in the face of a difficult market."
But Read acknowledged that AMD's full-year results fell short of expectations as a tough economy hurt PC sales. AMD plans to complete the majority of a significant restructuring announced last year during the first quarter, Read said. The company's goal is to reduce its operating expenses by 25 percent from early 2012 levels by the third quarter, and to return to profitability and positive cash flow by the second half of this year, he said.
AMD is charting a new course to focus more heavily on non-PC markets, including embedded markets, heterogeneous computing and dense servers. Since Read took over as AMD's CEO in 2011 the company has been looking to shed its longtime image as a distant No. 2 player in the PC processor space to Intel and re-make itself as a system-on-chip provider.
Read said AMD's strategic shift would take several quarters. The company expects to PC market to remain slugish in the first half of 2013.
AMD plans to introduce several new graphics chips and processors in the first half of 2013, Read said. "We have the right strategy and a new set of products coming to market in 2013," Read said.
Last October, AMD announced it would lay off 15 percent of its employees to cut costs while undertaking an aggressive push into embedded markets to counter declining PC sales. The company also cut 10 percent of its workforce 2011.