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AMD makes a $36 million loss in its second quarter

by Mark Tyson on 18 July 2014, 09:43

Tags: AMD (NYSE:AMD)

Quick Link: HEXUS.net/qacgsf

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AMD's results for Q2 2014 were published yesterday evening. The earnings were a little below targets and the firm made a loss of $36 million, worse than the previous quarter loss of $20 million, despite revenue being up 3 per cent sequentially. This is quite a different story to Intel's mainly bright and positive Q2 results from a couple of days back.

AMD GAAP Financial Results

 
   

Q2-14

 

Q1-14

 

Q2-13

Revenue

 

$1.44B

 

$1.40B

 

$1.16B

Operating income (loss)

 

$63M

 

$49M

 

$(29)M

Net loss / Loss per share

 

$(36)M/$(0.05)

 

$(20)M/$(0.03)

 

$(74)M/$(0.10)

 

AMD president and CEO Rory Read remained positive "The second quarter capped off a solid first half of the year for AMD with strong revenue growth and improved financial performance," he said. "Our transformation strategy is on track and we expect to deliver full year non-GAAP profitability and year-over-year revenue growth. We continue to strengthen our business model and shape AMD into a more agile company offering differentiated solutions for a diverse set of markets."

Looking at AMD Computing Solutions first, the firm's revenue fell 1 per cent sequentially and 24 per cent compared to a year earlier. However it managed to squeeze more margin out of the fewer sales it did make, thanks to supplying chips for "a richer mix of notebook products".

AMD Graphics and Visual Solutions did much better, with a 5 per cent sequential increase and 141 per cent yearly increase in revenue generation. This was mainly thanks to the "increased semi-custom SoC shipments," such as its next gen console chips. Further analysis does reveal that GPU revenue was down both from the previous quarter (sequentially) and a year earlier. However professional graphics solutions helped stem this downturn.

In a conference call following the results publication, the downturn in AIB channel GPU sales was blamed partly on the "slowdown in cryptocurrency mining-related enthusiast-class GPU purchases". Also, as miners turned to more efficient techniques for reaping Bitcoins and similar, the market is said to have been flooded with high end GPUs being sold off.

Positive moves by AMD in the recently completed quarter include; the unvieiling of the ambidextrous computing roadmap, the creation of the two above business groups, the appointment of Dr Lisa Su as COO, detailing plans to accelerate the energy efficiency of its APUs, design wins in Acer, Dell, HP and Lenovo laptops and the wider adoption of the Mantle API by the games industry.



HEXUS Forums :: 17 Comments

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Gah, it's terrifying to see AMD posting losses reliably. I do not want to see AMD fold as a company as what little competition they offer against Intel and Nvidia will disappear. I imagine someone will eventually purchase there IP but in the gap between production re-starting with a new company it would look like a very poor market. That's also considering Nvidia and Intel don't pick it apart just to ensure the competition has to build from scratch.
"Our transformation strategy is on track and we expect to deliver full year non-GAAP profitability and year-over-year revenue growth"


Non-GAAP profitability eh? :rolleyes:

I'm certainly no accountant, but if you can't manage to show a profit using generally accepted accounting practices, then I'm somewhat sceptical that it's really a profit.
Fraz
Non-GAAP profitability eh? :rolleyes:

I'm certainly no accountant, but if you can't manage to show a profit using generally accepted accounting practices, then I'm somewhat sceptical that it's really a profit.

It'll probably be regarding how exceptional items are accounted for. Such as write down of stocks and other such large one off items. So instead of taking a hit to the P&L in the period of occurrence ( which is probably what the current US GAAP states, it's what UK GAAP states ) they could be forced to write it off over several periods .

It could also be how they account for large contracts. This is can be a very complex area of accounting as to when you actually recognise the sale. Perhaps the new standard they will adopt will bring forward the point you recognise the sale in your accounts, therefore including more revenue, and hopefully turning a profit.

I think...
Interesting to see professional graphics has greater sales now.
Jowsey
Gah, it's terrifying to see AMD posting losses reliably. I do not want to see AMD fold as a company as what little competition they offer against Intel and Nvidia will disappear. I imagine someone will eventually purchase there IP but in the gap between production re-starting with a new company it would look like a very poor market. That's also considering Nvidia and Intel don't pick it apart just to ensure the competition has to build from scratch.

While I too wouldn't want to see AMD disappear*, it might be interesting to speculate on how the market would develop if NVidia and Intel "vultures" pounced on the AMD carrion and took away complimentary parts. So Intel grabbed the ex-ATi parts and NVidia got the "mainline AMD" (desktop/server processor lines).

Although I would have thought that with both Sony and Microsoft picking up AMD parts for their next-gen consoles AMD would be in good state. Strange.

(* Current gaming rig runs AMD CPU and GPU)