Q1 2013 Results
- AMD revenue $1.09 billion, decreased 6 percent sequentially and 31 percent year-over-year
- Gross margin 41 percent
- Operating loss of $98 million, net loss of $146 million, loss per share of $0.19
- Non-GAAP1 operating loss of $46 million, net loss of $94 million, loss per share of $0.13
AMD (NYSE:AMD) today announced revenue for the first quarter of 2013 of $1.09 billion, an operating loss of $98 million and a net loss of $146 million, or $0.19 per share. The company reported a non-GAAP operating loss of $46 million and a non-GAAP net loss of $94 million, or $0.13 per share.
"Our first quarter results reflect our disciplined operational execution in a difficult market environment," said Rory Read, AMD president and CEO. “We have largely completed our restructuring and are now focused on delivering a powerful set of new products that will accelerate our business in 2013. We will continue to diversify our portfolio and attack high-growth markets like dense server, ultra low-power client, embedded and semi-custom solutions to create the foundation for sustainable financial returns.”
Quarterly Financial Summary
- Gross margin was 41 percent.
- Gross margin increased sequentially due to a $20 million benefit from sales of inventory that had been previously reserved which positively impacted gross margin by 2 percentage points.
- Cash, cash equivalents and marketable securities balance, including long-term marketable securities, was $1.2 billion at the end of the quarter.
- First quarter cash was bolstered by the closing of a sale and leaseback transaction of the “Lone Star Campus” in Austin, Texas generating cash proceeds of approximately $164 million, net of certain fees.
- Computing Solutions segment revenue decreased 9 percent sequentially and 38 percent year-over-year. The sequential decrease was primarily due to lower desktop, notebook and chipset unit shipments. The year-over-year decline was driven primarily by lower unit shipments.
- Operating loss was $39 million, compared with an operating loss of $323 million in Q4 2012 and operating income of $124 million in Q1 2012. The Q4 2012 operating loss included the impact of a GLOBALFOUNDRIES-related “lower of cost or market” (LCM) charge of $273 million.
- Microprocessor Average Selling Price (ASP) increased sequentially and decreased year-over-year.
- Graphics segment revenue increased 3 percent sequentially and decreased 12 percent year-over-year. Graphics processor unit (GPU) revenue was flat sequentially and down year-over-year.
- Operating income was $16 million, compared with $22 million in Q4 2012 and $34 million in Q1 2012.
- GPU ASP increased sequentially and year-over-year.
- Sony announced a semi-custom AMD APU would power its upcoming PS4 gaming console. The APU combines AMD’s “Jaguar” processor cores and next-generation AMD Radeon™ graphics, integrating a combination of x86 processor cores and advanced graphics IP unique to AMD.
- Highlighting AMD’s commitment to optimizing the world’s top PC titles for AMD Radeon™ graphics cards, the company launched the “Never Settle: Reloaded” promotion. The current program bundles up to five of the year’s most anticipated PC games ─ “BioShock® Infinite” by 2K Games and Irrational Games, “Crysis® 3” by Electronic Arts and Crytek, “DmC Devil May Cry™” by Capcom®, “Tomb Raider®” by Square Enix and Crystal Dynamics™ and most recently, “Far Cry® 3 Blood Dragon” by Ubisoft® ─ with the purchase of select AMD Radeon™ HD 7900 Series, HD 7800 Series as well as HD 7790 and HD 7770 graphics cards.2
- AMD ushered in the new frontier of gaming realism with the introduction of TressFX Hair – a collaboration with Crystal Dynamics to deliver the world’s first real-time hair rendering technology that can react to forces like gravity, wind and head movement in a playable game. The technology uses the DirectCompute programming language to unlock the capabilities of the AMD Graphics Core Next architecture and is featured heavily in the newly launched PC version of Tomb Raider.
- AMD expanded its server graphics solutions with the introduction of the AMD FirePro™ R5000 remote graphics card supporting remote 3D-graphics workflows and full computing experiences over IP networks.
- AMD moved into cloud gaming with AMD Radeon™ Sky Graphics, based on AMD Graphics Core Next architecture. Working with CiiNow, G-Cluster, Otoy and Ubitus, AMD developed a flexible cloud gaming technology that enables developers and service providers to deliver excellent gaming experiences through PCs, tablets, smart TVs and mobile devices.
- AMD announced AMD Turbo Dock Technology3 which automatically adjusts performance of the AMD accelerated processing unit (APU) higher while a hybrid PC is docked and being used for more complex tasks like content creation.
- AMD began shipping the next generation of AMD Elite A-Series APUs, codenamed “Richland," which combine improved performance and battery life4,5 with advanced user experiences like AMD Face Login6 and AMD Gesture Control.7
- AMD extended its commitment to drive the development of accelerated applications that tap into the full compute performance of the APU through collaboration with Aviary to bring an optimized version of its popular photo editing tool to Windows 8 PCs and tablets powered by AMD APUs.
- AMD announced that the SeaMicro SM15000™ server is now certified for CDH4, Cloudera’s Distribution, creating a “Hadoop-in-a-Box” solution. Red 5, Livestream and Wayfair also announced they have deployed SeaMicro-powered microservers across their businesses.
- AMD launched the AMD Open 3.0 server platform, a radical rethinking of the server motherboard designed to the standards developed by the Open Compute Project. The AMD Open 3.0 server enables substantial gains in computing flexibility, efficiency and operating cost by simplifying motherboard design.
- Aligned with the company's strategy to reduce investments and capital in non-core parts of the business, AMD announced that it sold and leased-back its "Lone Star Campus" in Austin, Texas, generating approximately $164 million in cash, net of certain fees.
AMD’s outlook statements are based on current expectations. The following statements are forward-looking, and actual results could differ materially depending on market conditions and the factors set forth under “Cautionary Statement” below.
For the second quarter of 2013, AMD expects revenue to increase 2 percent, plus or minus 3 percent, sequentially.
For additional details regarding AMD’s results and outlook please see the CFO commentary posted at quarterlyearnings.amd.com.
AMD will hold a conference call for the financial community at 2 p.m. PT (5 p.m. ET) today to discuss its first quarter financial results. AMD will provide a real-time audio broadcast of the teleconference on the Investor Relations page of its web site at www.amd.com. The webcast will be available for 12 months after the conference call.
AMD (NYSE: AMD) is a semiconductor design innovator leading the next era of vivid digital experiences with its groundbreaking AMD Accelerated Processing Units (APUs) that power a wide range of computing devices. AMD’s server computing products are focused on driving industry-leading cloud computing and virtualization environments. AMD’s superior graphics technologies are found in a variety of solutions ranging from game consoles, PCs to supercomputers. For more information, visit www.amd.com.
This document contains forward-looking statements concerning AMD, its second quarter of 2013 revenue, the pace of the company’s business in 2013, the company’s opportunities in high-growth markets, and the potential for sustainable financial returns in the future, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are commonly identified by words such as “believes, "expects," “may,” “will,” “should,” “seeks,” “intends,” “pro forma,” “estimates,” “anticipates,” "plans," "projects," and other terms with similar meaning. Investors are cautioned that the forward-looking statements in this release are based on current beliefs, assumptions and expectations, speak only as of the date of this release and involve risks and uncertainties that could cause actual results to differ materially from current expectations. Risks include the possibility that Intel Corporation's pricing, marketing and rebating programs, product bundling, standard setting, new product introductions or other activities may negatively impact the company’s plans; the company may be unable to develop, launch and ramp new products and technologies in the volumes that are required by the market at mature yields on a timely basis; that the company’s third party foundry suppliers will be unable to transition its products to advanced manufacturing process technologies in a timely and effective way or to manufacture the company’s products on a timely basis in sufficient quantities and using competitive technologies; the company will be unable to obtain sufficient manufacturing capacity or components to meet demand for its products; the company’s requirements for wafers are less than the fixed number of wafers that it agreed to purchase from GLOBALFOUNDRIES (GF) or GF encounters problems that significantly reduce the number of functional die the company receives from each wafer; that the company is unable to successfully implement its long-term business strategy; that customers stop buying the company's products or materially reduce their operations or demand for the company’s products; that the company may be unable to maintain the level of investment in research and development that is required to remain competitive; that there may be unexpected variations in the market growth and demand for its products and technologies in light of the product mix that the company may have available at any particular time or a decline in demand; that the company will require additional funding and may be unable to raise sufficient capital on favorable terms, or at all; that global business and economic conditions will not improve or will worsen; that demand for computers will be lower than currently expected; and the effect of political or economic instability, domestically or internationally, on the company’s sales or supply chain. Investors are urged to review in detail the risks and uncertainties in the company's Securities and Exchange Commission filings, including but not limited to the Annual Report on Form 10-K for the year ended December 29, 2012.
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