AMD financials Q1 2012

[tviceman]

http://techreport.com/discussions.x/22824
http://www.marketwire.com/press-release/amd-reports-first-quarter-results-nyse-amd-1646569.htm

A big, fat ouch. On the GPU side of things, average selling prices were up, but revenue from GPU sales was down. Another ouch, and also an affirmation that 28nm based GPU's are (or at least were, before the price cuts) overpriced. Makes me wonder how Nvidia is going to fair on the GPU side of things (I am going to guess their numbers will be unimpressive as well).

 

[RavenSEAL]

Gotta lose money to make money, their future looks bright with Piledriver and their GPUs while they are still doing a good job with the server market.

Now that GlobalFoundries is independent, that will help them cut down the losses for their next quarterly report.

 

[Concillian]

Most of the loss seems to be them branching out on foundries. It's an ouch, but indicative that they feel that GF has REALLY hurt them on the CPU side. They feel GF is SO BAD that they are willing to pay them over 700 million dollars to be released from an exclusivity contract and be able to seek other foundries for 28nm CPUs.

That tells a whole lotta story right there.

GPU revenue down but margin up, that could mean anything in terms of profit numbers, but I'm betting total profit isn't all that different. The CPU side is the see-saw here.

 

[Olikan]

GPU revenue down but margin up, that could mean anything in terms of profit numbers, but I'm betting total profit isn't all that different. The CPU side is the see-saw here.

for gpus...
Operating income was $34 million, compared with $27 million in Q411 and $19 million in Q111

for cpus...
Operating income was $124 million, compared with $165 million in Q411 and $100 million in Q111

 

[StrangerGuy]

Their past GPU income wasn't exactly stellar when they consistently beat NV is perf/power/mm^2 and now the situation is reversed. That is going to suck for the subsequent quarters.

 

[Silverforce11]

Their past GPU income wasn't exactly stellar when they consistently beat NV is perf/power/mm^2 and now the situation is reversed. That is going to suck for the subsequent quarters.

Because they priced their cards so low that margins aren't good to generate a lot of income.

Looks like their Q1 income is higher than previous, so if anything, their GPU division is doing better.

Edit: "GPU revenue was up in a seasonally down quarter, due to higher improved desktop GPU ASP in the channel, offset by seasonally lower game console royalty revenue. The year-over-year decrease was primarily driven by lower demand for desktop and mobile graphics.
Operating income was $34 million, compared with $27 million in Q411 and $19 million in Q111."

If anything for them to generate a higher income when overall global sales are down and less console royalty means their GPUs are doing very very well.

 

[Nemesis 1]

http://techreport.com/discussions.x/22824
http://www.marketwire.com/press-release/amd-reports-first-quarter-results-nyse-amd-1646569.htm

A big, fat ouch. On the GPU side of things, average selling prices were up, but revenue from GPU sales was down. Another ouch, and also an affirmation that 28nm based GPU's are (or at least were, before the price cuts) overpriced. Makes me wonder how Nvidia is going to fair on the GPU side of things (I am going to guess their numbers will be unimpressive as well).

I think MV numbers will look good . Our organization which I am the head . has switched to NV graphics as the GPU of choice . This is a big change from ATI to NV . If you don't have NV graphics you can only advance to level 1. WE have 1200 members now and 953 have switched to nv in the last quarter.

 

[Jaydip]

I think MV numbers will look good . Our organization which I am the head . has switched to NV graphics as the GPU of choice . This is a big change from ATI to NV . If you don't have NV graphics you can only advance to level 1. WE have 1200 members now and 953 have switched to nv in the last quarter.

You mean NV right?

 

[Genx87]

Gotta lose money to make money, their future looks bright with Piledriver and their GPUs while they are still doing a good job with the server market.

Now that GlobalFoundries is independent, that will help them cut down the losses for their next quarterly report.

Heh that has been AMDs motto for the past 30 years. When does the making money part come?

 

[Jaydip]

Another 30 years maybe Seriously though their CEO seems to have a good vision and prospects look good for AMD.

 

[f1sherman]

an AMD bubble totally disjointed from reality,

where last Q $180M loss is great, and this quarter $590M loss is solid result,

and you hear this from none other then this fresh and dynamic new CEO

 

[Lonyo]

an AMD bubble totally disjointed from reality,

where last Q $180M loss is great, and this quarter $590M loss is solid result,

and you hear this from none other then this fresh and dynamic new CEO

It is a solid result.

The better numbers to look at for AMD currently are non-GAAP, because they tell you the performance of the underlying business.
Looking at the final figures tells you nothing when you have lots of exceptional items like AMD have and have had for the last few years while trying to divest their GloFo stake.

Going forwards, those losses won't appear again, because they are one off charges.

So while you may think he's living in a bubble disjointed from reality, the actual reality is that accounting figures are pretty meaningless most of the time, and don't tell you anything about the performance of the business.
The underlying basis of the financial statements is that AMD are now in a fairly strong position going forward, assuming their CPU and GPU divisions perform, and they don't need to worry about other things impacting the business anymore.

 

[f1sherman]

we heard the same thing last quarter, but this time they are even less bullish with forward expectation

it's ALWAYS some one-time expense, one-time re-balance, one-time waiver, obligation and whatnot.
I am pretty sure they are not off the GLOFO hook yet.


and please don't tell me to look non-GAAP,

because there's GAAP, there are SEC filling, and full financial statement,
so why the hell would I look at non-standard, unaccepted accounting to tell me the performance of the underlying business.

 

[Genx87]

It is amazing how AMD's one time expenses of hundreds of millions happens every other qtr.

 

[Lonyo]

we heard the same thing last quarter, but this time they are even less bullish with forward expectation

it's ALWAYS some one-time expense, one-time re-balance, one-time waiver, obligation and whatnot.
I am pretty sure they are not off the GLOFO hook yet.


and please don't tell me to look non-GAAP,

because there's GAAP, there are SEC filling, and full financial statement,
so why the hell would I look at non-standard, unaccepted accounting to tell me the performance of the underlying business.

Because the non-GAAP figures are there to tell you the performance of the underlying business.
That's their purpose.
Why should you look at something designed to tell you what you want to know to tell you what you want to know? I don't know, you tell me!

 

[tviceman]

I think MV numbers will look good . Our organization which I am the head . has switched to NV graphics as the GPU of choice . This is a big change from ATI to NV . If you don't have NV graphics you can only advance to level 1. WE have 1200 members now and 953 have switched to nv in the last quarter.

I'm sure revenue will be fine for Nvidia on the GPU side, but since Android-based tablets aren't exactly selling like hotcakes, and with Tegra 3 seemingly getting a very slow roll out, coupled with Nvidia dropping prices across their entire geforce 500 series lineup, and having only limited availability of their newest 28nm GPU, I don't expect spectacular results from them. I think Nvidia's Q2 will be much better than what they will report here next month, and by Q3 they will be peaking and, hopefully, be coming to market with a 28nm arm CPU.

 

[gammaray]

Gotta lose money to make money, their future looks bright with Piledriver and their GPUs while they are still doing a good job with the server market.

Now that GlobalFoundries is independent, that will help them cut down the losses for their next quarterly report.

If past is warrant of the future, they haven't made any profits in the past 10 years (ok maybe 1 or 2 quarter), imo Intel give them cash without our knowledge so they keep one competitor in the cpu business.

Amd has no clue whatsoever how to make profits.

 

[gammaray]

Because they priced their cards so low that margins aren't good to generate a lot of income.

Looks like their Q1 income is higher than previous, so if anything, their GPU division is doing better.

Edit: "GPU revenue was up in a seasonally down quarter, due to higher improved desktop GPU ASP in the channel, offset by seasonally lower game console royalty revenue. The year-over-year decrease was primarily driven by lower demand for desktop and mobile graphics.
Operating income was $34 million, compared with $27 million in Q411 and $19 million in Q111."

If anything for them to generate a higher income when overall global sales are down and less console royalty means their GPUs are doing very very well.

now i totally disagree with you.

Their cards isnt priced so low, its not even priced low enough to sell to the mass. They sell their mid-range graphic cards around 225$, yeah right. Way to go AMD.

thats the price of an intel I5 sandy bridge.

 

[f1sherman]

Because the non-GAAP figures are there to tell you the performance of the underlying business.
That's their purpose.

And you can't see the performance of the underlying business under standard accounting?

You need PR figures made on arbitrary God-knows-which principles i.e. non-GAAP?

Surely you realize that because "non-GAAP" is not standardized, company can, and they do the hell they want with non-GAAP figures?

 

[blckgrffn]

And you can't see the performance of the underlying business under standard accounting?

You need PR figures made on arbitrary God-knows-which principles i.e. non-GAAP?

Surely you realize that because "non-GAAP" is not standardized, company can, and they do the hell they want with non-GAAP figures?

I think there is good reason to evaluate both, given that you know what they changed moving from the GAAP numbers to the non-GAAP numbers. A business doesn't exist in three month chunks, so having more perspective can give you a more realistic picture of what is going on.

I thought Ryan did a good job of writing this up on Anandtech prime.

 

[Lonyo]

And you can't see the performance of the underlying business under standard accounting?

You need PR figures made on arbitrary God-knows-which principles i.e. non-GAAP?

Surely you realize that because "non-GAAP" is not standardized, company can, and they do the hell they want with non-GAAP figures?

Standard accounting has nothing to do with business performance at all.
It has to do with presenting an informative picture of all the activities of the business. Which isn't the same as the performance of the business.
If a business goes through a restructuring, that needs to be accounted for under GAAP. Does those restructuring costs/activities have anything to do with the performance of the business? Would you compare the pre-restructuring GAAP figures to the post restructuring GAAP figures which include the restructuring costs, and then derive your business performance from that?
No, you compare your non-GAAP like vs like figures, which tell you the underlying business performance, which then tells you how effective your restructuring was.

If you buy a company (e.g. AMD buying ATI) and then have a MASSIVE writeoff on the goodwill of that acquisition, does that writeoff mean suddenly your underlying business has lost $500m or something? No, your underlying business could be performing better than it was in the prior period, but you're still showing $500m of expense through the writeoff, which MUST be included in the GAAP figures, but doesn't reflect actual PERFORMANCE.

I also never said that non-GAAP could necessarily be used to compare between companies. I implied through context that it is used for comparing performance WITHIN a company, from year to year or quarter to quarter.

The Company is providing these financial measures because it believes this non-GAAP presentation makes it easier for investors to compare its operating results for current and historical periods and also because the Company believes it assists investors in comparing the Company's performance across reporting periods on a consistent basis by excluding items that it does not believe are indicative of its core operating performance and for the other reasons described in the footnotes to the selected data tables. Refer to corresponding tables at the end of this press release for additional AMD data.

From the AMD financials release in the text at the bottom that you would probably not normally read.

 

[pelov]

How is this bad news? They beat economists' estimates. The deals with GloFo, finally severing ties, and the SeaMicro acquisition total over 1B alone yet they only lost ~500m. Their GPUs are finally making them money, which for AMD is unbelievable considering they operated in the red for two whole years while they were climbing in market share, and considering the Bulldozer disaster I'm surprised it hasn't been worse. Since Read took over AMD's stock has increased and where they've spent money, SeaMicro/GloFo, investors seemed to agree with the direction.

 

[OCGuy]

Gotta lose money to make money, their future looks bright with Piledriver and their GPUs while they are still doing a good job with the server market.

Now that GlobalFoundries is independent, that will help them cut down the losses for their next quarterly report.

LOL at this whole post.

What about Piledriver looks "bright"?

 

[Lonyo]

How is this bad news? They beat economists' estimates. The deals with GloFo, finally severing ties, and the SeaMicro acquisition total over 1B alone yet they only lost ~500m. Their GPUs are finally making them money, which for AMD is unbelievable considering they operated in the red for two whole years while they were climbing in market share, and considering the Bulldozer disaster I'm surprised it hasn't been worse. Since Read took over AMD's stock has increased and where they've spent money, SeaMicro/GloFo, investors seemed to agree with the direction.

SeaMicro acquisition doesn't flow through to P&L, only some associated costs (as allowed by US GAAP) and any depreciation/amortisation of costs (as allowed by US GAAP), so the cost of buying SeaMicro doesn't count as an expense, because under US GAAP it's not allowed to be expensed.

 

[Mopetar]

Even so, they're going to need a good quarter soon. Getting a little better is fine, but they eventually need to get their head up from under the water.