AMD Reports First Quarter Results
SUNNYVALE, Calif. --
AMD (NYSE: AMD) today reported first quarter 2008 revenue of $1.505 billion, a net loss of $358 million, or $0.59 per share, and an operating loss of $264 million. These results include an impact of $50 million, or $0.08 per share, from ATI acquisition-related charges. First quarter revenue decreased 15 percent compared to the fourth quarter of 2007 and increased 22 percent compared to the first quarter of 2007. In the fourth quarter of 2007, AMD reported revenue of $1.770 billion, a net loss of $1.772 billion, and an operating loss of $1.678 billion. In the first quarter of 2007, AMD reported revenue of $1.233 billion, a net loss $611 million, and an operating loss of $504 million.
Reconciliation of GAAP Net Loss to Non-GAAP Net Loss1
|(Millions except per share amounts)
|GAAP net loss/EPS, less:
| ATI acquisition-related charges
| Tax benefit from ATI acquisition-related charges
| Spansion investment impairment
|Total net charges
|Non-GAAP net loss1
Reconciliation of GAAP Operating Loss to Non-GAAP Operating Loss1
|GAAP operating loss, less:
| ATI acquisition-related charges
|Non-GAAP operating loss1
“A seasonally weak first quarter was amplified by a challenging economic environment for consumers and lower than expected revenues of previous generation products, resulting in lower than expected revenues in all business segments. However, we are encouraged by the market acceptance of our Quad-Core AMD Opteron™ server processors as well as our new chipset and graphics offerings,” said Robert J. Rivet, AMD’s Chief Financial officer. “We remain committed to achieve operating profitability in the second half of the year, driven by our portfolio of new products and platforms and aggressive restructuring programs.”
First quarter 2008 gross margin was 42 percent compared to 44 percent in the fourth quarter of 2007 and 28 percent in the first quarter of 2007. The decrease from the prior quarter was primarily due to decreased microprocessor unit shipments.
| Microprocessor Units
| Microprocessor Average Selling Price (ASP)
| Average Selling Price (ASP)
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.
In the seasonally down second quarter, AMD expects revenue to decrease in line with seasonality. As previously disclosed, AMD expects to record a restructuring charge in the second quarter of 2008.
Additional Quarterly Highlights
- AMD began volume shipments of Quad-Core AMD Opteron processors. Initial systems are available now from several customers including Dell and HP and more platforms expected to be available in the coming weeks from our largest global customers.
- AMD launched seven new AMD Phenom™ processors, including:
- AMD Phenom X4 9100e, the industry’s first energy-efficient desktop quad-core processor;
- AMD Phenom X4 9850 Black Edition processor; and
- AMD Phenom X3 8000 series, the world’s first triple-core processor.
- AMD introduced the 780 Series chipset, the industry’s most advanced motherboard GPU and the first product capable of combining the graphics power of integrated motherboard and discrete graphics to deliver a better visual experience.
- AMD introduced the ATI Radeon™ HD 3870 X2 graphics card delivering leading performance for the enthusiast user and the ATI Radeon HD 3400 and ATI Radeon HD 3600 series to provide outstanding performance and unmatched value for the mainstream user. AMD also announced software updates to enable the world’s first quad-GPU support.
- AMD demonstrated its first 45nm quad-core processors for servers and desktops.
- AMD announced its first application processor for feature-rich multimedia mobile phones, strengthened its portfolio of discrete media processors, and expanded its handheld graphics IP offerings.
- AMD introduced the ATI FireGL™ V7700, the first commercially available 3D workstation graphics card with DisplayPort support, and a new 2D workstation graphics card which delivers exceptional energy efficiency and longevity.
AMD will hold a conference call for the financial community at 2:00 p.m. PT (5:00 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 10 days after the conference call.
Advanced Micro Devices (NYSE: AMD) is a leading global provider of innovative processing solutions in the computing, graphics and consumer electronics markets. AMD is dedicated to driving open innovation, choice and industry growth by delivering superior customer-centric solutions that empower consumers and businesses worldwide. For more information, visit www.amd.com.
This release contains forward-looking statements concerning revenue for the second quarter of 2008, profitability for the second half of 2008 driven by new products and platforms, restructuring programs, and availability of platforms containing the Quad-Core AMD Opteron processor, 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 “would,” “may,” “expects,” “believes,” “plans,” “intends,” “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 targeting the company’s business will prevent attainment of the company’s current plans; the company will require additional funding and may not be able to raise funds on favorable terms or at all; the company’s cost containment efforts will not be effective; customers stop buying the company’s products or materially reduce their operations or demand for its products; the company will be unable to develop, launch and ramp new products and technologies in the volumes and mix required by the market and at mature yields on a timely basis; the company’s competitors, customers and suppliers may take actions that will negate the anticipated benefits of the company’s acquisition of ATI; demand for computers and consumer electronics products and, in turn, demand for the company’s products will be lower than currently expected; global business and economic conditions will worsen, resulting in lower than currently expected revenue in the second quarter of 2008 and beyond; there will be unexpected variations in market growth and demand for the company’s products and technologies in light of the product mix that it may have available at any particular time or a decline in demand; the company will be unable to transition to advanced manufacturing process technologies in a timely and effective way, consistent with planned capital expenditures; the company will be unable to maintain the level of investment in research and development and capacity that is required to remain competitive; and the company will be unable to obtain sufficient manufacturing capacity or components to meet demand for its products or will under-utilize its microprocessor manufacturing facilities. 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, 2007.
1 In this press release, in addition to GAAP financial results, AMD has provided non-GAAP financial measures for operating loss and net loss to reflect its financial results without ATI acquisition-related charges (refer to footnote 4 of the financial tables for further details of these charges) for operating loss and in addition, for Q4-07 without the tax benefit from ATI acquisition-related charges and investment impairment charges for net loss. Management believes this non-GAAP presentation makes it easier for investors to compare current and historical period operating results.
AMD, the AMD Arrow logo, AMD Opteron, AMD Phenom and combinations thereof, and ATI, the ATI logo, FireGL and Radeon are trademarks of Advanced Micro Devices, Inc. Other names are for informational purposes only and used to identify companies and products and may be trademarks of their respective owners.