AMD ousts Ruiz after $1.2B charge, names Meyer president and CEO
By Ann Steffora Mutschler, Senior Editor -- 7/17/2008
Following the announcement that its Q2 net loss was worse than expected, Sunnyvale, Calif.-based microprocessor challenger Advanced Micro Devices Inc’s board of directors elected president and COO Dirk Meyer to president and CEO, succeeding Hector Ruiz, who moves to the executive chairman seat of AMD and chair of the company’s board of directors.
“Dirk’s election to CEO is the final phase of a two-year succession plan developed and implemented jointly by AMD’s board of directors and executive team. Dirk’s extensive experience as a business leader and his notable engineering accomplishments before and during his 12 years at AMD make him ideally suited to build upon the foundation Hector created and lead AMD,” explained Robert Palmer, lead independent director of AMD, in a statement.
Meyer (pictured left) joined AMD in 1995 and was part of the design team responsible for the original AMD Athlon processor. From 2001 to 2006, Meyer led the company’s microprocessor business, overseeing related R&D, manufacturing, operations, and marketing. His leadership skills are credited with a doubling of revenue for the microprocessor business and expansion of AMD’s global profile. In 2006, Meyer was appointed president and COO, and was elected to AMD’s board of directors last year.
“I’m tremendously excited by the opportunities ahead for AMD. As the only company that possesses expertise and leadership in both x86 microprocessor and graphics technology, AMD has a unique capability to drive the next wave of innovation through the integration of computing and graphics processors to deliver a better computing experience,” Meyer said.
“We are in the midst of re-shaping AMD’s business model with the goal of delivering sustained profitability through a focus on the core technologies that differentiate AMD. My immediate priority is to work with the leadership team to accelerate this transformation. I appreciate the trust that the Board and Hector have placed in me. During the years that I’ve worked under Hector, he has been an excellent leader, mentor and friend.”
Ruiz said of the appointment, “Dirk is a gifted leader who possesses the right skills and experience to continue driving AMD and the industry forward in new, compelling directions. I am placing the company in excellent hands.”
Ruiz joined AMD as president and COO in January 2000 and became AMD's CEO on April 25, 2002. He has served on AMD’s board of directors since 2000 and was appointed chairman of the board of directors in 2004.
In terms of AMD’s Q2 financial results, the company reported Q2 revenue from continuing operations of $1.35 billion, a 7% sequential decrease compared to Q1 and a 3% increase over Q2 2007.
Further, as part of a review of its non-core businesses, AMD decided to divest its handheld and DTV product businesses, and therefore is classifying them as discontinued operations for financial reporting.
AMD’s Q2 net loss reached $1.19 billion, or $1.96 per share. For continuing operations, the Q2 loss was $269 million, or 44 cents per share, with the operating loss $143 million. The results for continuing operations include a net favorable impact of $97 million, or 16 cents per share. Loss from discontinued operations was $920 million, or $1.52 a share, including asset impairment charges of $876 million, or $1.44 a share.
By comparison, Q1 revenue from continuing operations was $1.47 billion, a net loss of $358 million, a loss from continuing operations of $308 million and an operating loss of $214 million; Q2 2007 revenue from continuing operations was $1.31 billion, a net loss of $600 million, a loss from continuing operations of $531 million and an operating loss of $396 million.
“While we had a disappointing quarter financially, customer adoption of our recently introduced microprocessor and graphics products and platform offerings is strong, and we see increasing momentum across our businesses. In the face of challenging macroeconomic conditions, we remain committed to achieving operating profitability in the second half of the year based on the continued ramp of new products, increased market penetration of our differentiated solutions, and continued actions designed to reduce our breakeven point,” commented Robert J. Rivet, CFO of AMD.
Q2 gross margin was 52%. Excluding the positive impact associated with the sale of 200-mm manufacturing equipment, Q2 gross margin was 37%, compared to 41% in Q1 and 34% in Q2 2007.
Looking ahead to the seasonally up Q3, AMD expects revenue to increase in line with seasonality.
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