Another earnings season got underway today when Alcoa reported. Of the companies I follow closely the first to report on its second quarter (Q2) will be the computer chip maker AMD.
Q1 2010 was the best first quarter in AMD's history, with revenue of $1.57 billion and GAAP net income fo $257 million. Guidance for Q2 (given at the AMD Q1 2010 analyst conference) was that it would be down seasonally from Q1. That is a typical seasonal pattern. In Q3 and Q4 each year the computer makers who are AMD's customers start ramping up for back-to-school and Christmas holiday sales.
I suspect that, within that context, Q2 has been a pretty good quarter, largely based on watching advertisements for consumer and enterprise computer equipment. In graphics chips NVIDIA did not come out with its new, competitive chips until well into the quarter, and even then supplies seem minimal, with AMD dominating key price points. I saw a number of adds for AMD graphics in machines that use Intel CPUs, which is a positive surprise.
In the CPU department I think the results may be mixed. Intel seems to continue to dominate in notebooks, while AMD has made some gains in the desktop department. Desktops are going a bit out of style as consumer items, and margins are low, but they are still critical for people who are doing non-mobile work where having computational power and large screens is still a big plus.
Finally, there is the server CPU market. I am seeing mixed signals here. AMD and Intel are more differentiated in servers than they were a few years ago. AMD has gone for more cores per CPU and more processing power per dollar, but Intel leads in pure performance. I doubt AMD made much headway against Intel in server market share this quarter, but it should still be a rising tide situation.
We'll get AMD's numbers on Thursday, July 15th. I'll be taking notes on the analyst conference and post them at AMD Q2 2010 analyst conference. You can also listen to the conference yourself live on the Internet, starting at AMD Q2 live conference. That will be at 2:00 PM Pacific Time (5:00 PM Eastern Time). If you miss it you can also listen to an archived recording later.