AMD today announced revenue for the second quarter of 2012 of $1.41 billion, net income of $37 million, or $0.05 per share, and operating income of $77 million. The company reported non-GAAP net income of $46 million, or $0.06 per share, and non-GAAP operating income of $86 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," said Rory Read, AMD president and CEO. "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. 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."

AMD expects revenue to decrease 1 percent, plus or minus 3 percent, sequentially for the third quarter of 2012.

Stacy A. Rasgon - Sanford C. Bernstein & Co., LLC., Research Division

First, a question on your take-or-pay arrangement with GLOBALFOUNDRIES, how does the lower demand outlook that you're looking at now actually affect that take-or-pay given I thought that you were supposed to give them -- for 12-month fixed forecast? What impact has that actually had on your inventory build? What impact will that have going forward? And what impact did that actually have in your gross margins, given that you've already apparently committed to those forward purchases?

Rory P. Read

First, I'd like to comment on our relationship with GLOBALFOUNDRIES. And I want to personally acknowledge the progress they've made over the past several quarters in improving their execution. We're building a stronger partnership, where every week we're on ongoing dialogues with them in terms of how to improve yield, how to add, deliver the supply and improve our businesses going forward. We've seen significant progress from GLOBALFOUNDRIES and their execution has improved dramatically year-over-year.

Thomas Seifert

So with that being said, Stacy, their -- the commitment is pretty much a 2012 commitment and not so much a from here on 12 months moving forward commitment. And both companies are very focused on making sure that we have a mutually successful business arrangement and in light of a weakening PC environment, we are in discussions, of course, not only with GLOBALFOUNDRIES but with all of our foundry partners and with all of our suppliers, as a matter of fact, in order to make sure that we manage inventory correctly in the light of the weakening demand environment to be very honest. This is not so much a matter of gross margin, it's much more a matter of inventory and cash, how you have to look at this topic.

Stacy A. Rasgon - Sanford C. Bernstein & Co., LLC., Research Division

Yes, but if you have too much inventory eventually, if you've got to discount it to get rid of it, it hits gross margin. So are you still going to be committed to accepting your 2012 forecast as you gave it to them at the beginning of the year under the wipe out agreement is currently written?

Thomas Seifert

As I said, we are in discussions with all of our foundry partners to make sure that we manage inventory responsible and working capital responsible in light of their demand environment as it has developed late in the second quarter.

Vivek Arya - BofA Merrill Lynch, Research Division

I'm wondering how discrete the graphics market share trended. Your competitor did launch a new product. You also had new products. So how did the market share evolve in the last quarter and how do you see it evolving in the second half of the year?

Rory P. Read

From our standpoint, I think it's important to acknowledge again we recaptured the position of the world's fastest graphics chip. And again, the -- within the quarter, a solid quarter within seasonality. Lisa, any comments you'd like to offer around graphics?

Lisa T. Su

No, I would say that we're pleased with our graphics performance from a competitiveness standpoint. We did launch in the last couple of weeks a very strong offering to get to the gigahertz level with our Radeon series. So we continue to believe that this is a very strong product portfolio for us.

Vivek Arya - BofA Merrill Lynch, Research Division

Okay, any comments on market share? Do you have any sense for that now or...

Lisa T. Su

I think we have to wait until the numbers come out.

The company reported non-GAAP net income of $46 million, or $0.06 per share, and non-GAAP operating income of $86 million.

The term "GAAP" is an abbreviation for Generally Accepted Accounting Principles (GAAP). GAAP is a codification of how CPA firms and corporations prepare and present their business income and expense, assets and liabilities on their financial statements. GAAP is not a single accounting rule, but rather the aggregate of many rules on how to account for various transactions. The basic principles underlying GAAP accounting are set forth below.

When preparing financial statements using GAAP, most American corporations and other business entities use the many rules of how to report business transactions based upon the various GAAP rules. This provides for consistency in the reporting of companies and businesses so that financial analysts, banks, shareholders and the SEC(Securities & Exchange Commission) can have all reporting companies preparing their financial statements using the same rules and reporting procedures. This allows for an "apples to apples" comparison of any corporation or business entity with another. Thus, if company A reports $1,000,000 of net income, using GAAP, then the public and other users of financial statements can compare that net income to another company that is reporting $500,000 of net income, using GAAP.

Microprocessor ASP decreased sequentially and year-over-year.

Graphics segment revenue was down sequentially and remained flat year-over-year. GPU revenue was down 5 percent in a seasonally down quarter, due to lower unit shipments in the channel.

GPU ASP was flat sequentially and up year-over-year.

Advanced Micro Devices chief executive Rory Read said that the chip maker’s second-quarter financial results were a “disappointment” and meant that the company did not meet its commitments that he pledged when he joined the company last August.

AMD closed the quarter with 11,737 employees, compared with 11,599 a year earlier.

They Acquired Sea-Micro. Don't know if it would account for 10% of their old workforce though.