AMD Reports 2014 Third Quarter Results

SUNNYVALE, CA -- (Marketwired) -- Oct 16, 2014 -- AMD (NYSE: AMD)

  • Q3 2014 Results
    • Revenue of $1.43 billion, flat sequentially and a decrease of 2 percent year-over-year
    • Gross margin of 35 percent
    • Operating income of $63 million and non-GAAP(1) operating income of $66 million
    • Net income of $17 million, earnings per share of $0.02 and non-GAAP(1) net income of $20 million, non-GAAP earnings per share of $0.03
  • Announces restructuring plan to better position the company for profitability and long-term growth

AMD (NYSE: AMD) today announced revenue for the third quarter of 2014 of $1.43 billion, operating income of $63 million and net income of $17 million, or $0.02 per share. Non-GAAP (1) operating income was $66 million and non-GAAP (1) net income was $20 million, or $0.03 per share.

"AMD's third quarter financial performance reflects progess in diversifying our business," said Dr. Lisa Su, AMD president and CEO. "Our Enterprise, Embedded and Semi-Custom segment results were strong; however, performance in our Computing and Graphics segment was mixed based on challenging market conditions that require us to take further steps to evolve and strengthen the financial performance of this business. Our top priority is to deliver leadership technologies and products as we continue to transform AMD."

                                                                            
                           GAAP Financial Results                           
                                                                            
----------------------------------------------------------------------------
                                        Q3-14         Q2-14         Q3-13   
----------------------------------------------------------------------------
 Revenue                               $1.43B        $1.44B        $1.46B   
----------------------------------------------------------------------------
 Operating income                       $63M          $63M          $95M    
----------------------------------------------------------------------------
 Net income (loss) / Earnings (loss)                                        
 per share                           $17M/$0.02  $(36)M/$(0.05)  $48M/$0.06 
----------------------------------------------------------------------------
                                                                            
                                                                            
                        Non-GAAP Financial Results(1)                       
                                                                            
                                                                            
----------------------------------------------------------------------------
                                          Q3-14        Q2-14        Q3-13   
----------------------------------------------------------------------------
 Revenue                                 $1.43B       $1.44B       $1.46B   
----------------------------------------------------------------------------
 Operating income                         $66M         $67M         $78M    
----------------------------------------------------------------------------
 Net income / Earnings per share       $20M/$0.03   $17M/$0.02   $31M/$0.04 
----------------------------------------------------------------------------
                                                                            

Effective July 1, 2014, AMD reorganized into two business groups, one focused on the traditional PC market and the second focused on adjacent high-growth opportunities.

Accordingly, AMD has two reportable segments:

  • Computing and Graphics, which primarily includes desktop and notebook processors and chipsets, discrete GPUs and professional graphics; and
  • Enterprise, Embedded and Semi-Custom, which primarily includes server and embedded processors, dense servers, semi-custom SoC products, engineering services and royalties.

Quarterly Financial Summary

  • Gross margin was 35 percent in Q3 2014.
    • Gross margin was flat sequentially and included a $27 million, or 2 percent benefit, from revenue related to technology licensing.
  • Cash, cash equivalents and marketable securities were $938 million at the end of the quarter, essentially flat from the prior quarter.
  • Total debt at the end of the quarter was $2.20 billion.
  • Computing and Graphics segment revenue decreased 6 percent sequentially and decreased 16 percent year-over-year. The sequential decrease was primarily driven by lower chipset and GPU sales. The year-over-year decline was primarily due to decreased notebook processor and chipset sales.
    • Operating loss was $17 million, compared with an operating loss of $6 million in Q2 2014 and operating income of $9 million in Q3 2013. The sequential decrease was primarily driven by lower revenue while the year-over-year decrease was primarily driven by lower revenue partially offset by lower operating expenses.
    • Client average selling price (ASP) increased sequentially and year-over-year primarily driven by a richer mix of notebook processor sales.
    • GPU ASP decreased sequentially due to lower desktop GPU ASP and increased year-over-year.
  • Enterprise, Embedded and Semi-Custom segment revenue increased 6 percent sequentially and 21 percent year-over-year primarily driven by increased sales of semi-custom SoCs.
    • Operating income was $108 million compared with $97 million in Q2 2014 and $92 million in Q3 2013. The sequential and year-over-year increase was primarily due to increased sales of semi-custom SoCs.
    • Embedded revenue grew by double digits on a percentage basis sequentially.


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