Advanced Micro Devices Inc AMD
Q2 2012 Earnings Call Transcript

Operator: Good afternoon. My name is, Huey, and I'll be your conference operator for today. At this time, I would like to welcome everyone to AMD's Second Quarter 2012 Earnings Conference Call. All lines have been placed on a listen-only mode at this time. After the speakers' remarks, you will be invited to participate in the question-and-answer session. As a reminder, this conference is being recorded today.

I’d now like to turn the conference over to Ms. Ruth Cotter, Vice President of Investor Relations for AMD. Please go ahead.

Ruth Cotter - IR: Thank you, and welcome to AMD's second quarter earnings conference call. By now, you should have had the opportunity to review a copy of our earnings release and the CFO commentary. If you’ve not reviewed the documents, they can be found on AMD's website at quarterlyearnings.amd.com.

Participants on today’s conference call are Rory Read, our President and Chief Executive Officer; and Thomas Seifert, our Senior Vice President and Chief Financial Officer. For the Q&A portion of the call, we will be joined by Lisa Su, our Senior Vice President and General Manager, Global Business Units.

This is a live call and will be replayed by a webcast on amd.com. I'd like to take this opportunity to highlight a few dates for you. Rory Read will present at the City Technology Conference on the 4th of September in New York. Our third quarter Quiet Time will begin at the close of business on Friday September 14, and lastly we intend to announce our third quarter earnings on, October 18. Dial-in information for the call will be provided publicly in mid September.

Please note any reference to non-GAAP financial measures are reconciled in the CFO written commentary posted on our website quarterlyearnings.amd.com.

Before we begin today, let me remind everyone that our discussion contains forward-looking statements based on the environment as we currently see as. Those statements are based on current beliefs, assumptions and expectations, speak only as of the current date, and as such involve risks and uncertainties that could cause actual results to differ materially from our current expectations.

Please refer to the cautionary statement in our press release for more information. You will also find detail discussions about our risk factors in our filings with the SEC and in particular AMD's quarterly reports on Form 10-Q for the quarter ended March 31, 2012.

Now with that, I'd like to hand the call over to Rory. Rory?

Rory Read - President and CEO: Thank you, Ruth. Clearly, our performance in the quarter was disappointing and did not meet our commitments. When I joined AMD last year, we laid out a set of priorities to improve our execution and transform the Company to sustain our long-term growth potential. This has not changed. In spite of the set back in the quarter, we continue to move forward confidently and we are taking the right steps to strengthen and transform our business.

For the second quarter, our revenue of $1.41 billion decrease 10% from a year ago, and 11% sequentially missing our expectations. After a reasonable start, we saw business velocity slow in the later part of the quarter, driving this revenue miss. This second quarter revenue shortfall was largely driven by two key factors. First, weak sales of desktop processors in the channel, primarily in China and Europe, and secondly, a soft consumer PC market that impacted OEM notebook processor sales.