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AMD Q3 Results

ShintaiDK

ShintaiDK

Lifer
http://ir.amd.com/phoenix.zhtml?c=74093&p=irol-newsArticle&ID=1978751

Relatively flat Q. But computing and graphics is still bleeding. While embedded is growing.

The good part:

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.
Click to expand...
The bad part:

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.
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And now the ugly part.

The restructuring plan, which will be largely implemented in Q4 2014, is expected to:

  • Reduce global headcount by 7 percent, largely expected to be completed by the end of Q4 2014;
  • Align AMD's real estate footprint with its reduced headcount;
  • Result in a restructuring and impairment charge of approximately $57 million in Q4 2014, primarily related to severance, and a restructuring charge of approximately $13 million in 1H 2015, primarily related to real estate actions;
    • The company expects to make cash payments related to these actions of approximately $34 million in Q4 2014 and $20 million in 1H 2015;
  • Result in operational savings, primarily in operating expenses, of approximately $9 million in Q4 2014 and approximately $85 million in 2015.
  • For Q4 2014, AMD expects revenue to decrease 13 percent, plus or minus 3 percent, sequentially
Click to expand...
 
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Here's hoping it's the last round of layoffs. Sucks whenever people lose their jobs.

Those console contracts are really helping AMD keep in the black.
 
Q4 could be down to $1,2 billion.
nVidia could be at the same point at the end of Q4...
 
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Ouch for AMD, but at least they're not bleeding money anymore. I have a feeling the 4th quarter decline is due to lack of answer against nvidia maxwell.
 
Could have been worse. At least they did not lose money. Still I have to wonder how AMD keeps chugging along year after year just hovering around the break-even point. Stock took a sharp drop after hours but is coming back, so pretty much what people expected.

Edit: They really need to get another revenue stream going as consoles slow down and in case they dont get the next console contract, which could well happen.
 
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Let's look at the 4q forecast. AMD is saying about $1.2B in revenue. For years their target has been to break even at $1.3B in revenue - although they have never managed to do so. They are no way going to earn any profit with their prediction.

The end of the year is going to be a disaster for them.
 
There's a few people I would like to see comment in this thread. I think IDC will be the only one though.
 
ShintaiDK said:
Or due to changes in embedded pricing. 13% is way too much to be GPU alone.
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I suspect embedded contributes a very small percentage of AMD's total revenue. More likely laptop and desktop is losing marketshare. I see very few design wins for Kaveri.
 
lefty2 said:
I suspect embedded contributes a very small percentage of AMD's total revenue. More likely laptop and desktop is losing marketshare. I see very few design wins for Kaveri.
Click to expand...

I'm not surprised- it was about a year later than it should have been, and still underwhelmed massively. Carrizo is just going to be more of the same I fear.

Here's hoping the console revenue can tide them over until they can start producing interesting products again.
 
Yeah, it is pretty clear now that the nice story-telling about how Rory had done his job but that Lisa was better suited to take the reigns now that AMD has turned a corner was just a fluffy way of telling shareholders that Rory failed despite the BoD giving him 3 years to get the job done and now they (immediately) want another person in there to give it a go.

It explains why Rory immediately quit both the CEO and BoD's positions. When your BoD fires you, you don't get to stick around and make small talk in the board room for months thereafter.

Still, he gets to laugh all the way to the bank. 7% of AMD employees get to lose their jobs as a Q4 Christmas bonus this year, whereas Rory gets fired AND handed a $5m check. From Rory's personal perspective he's got to call that a success.

If the BoD had any confidence in Rory's turn-around plan then they would have kept him on for at least another year (would have only cost them $1m instead of $5m they paid to get rid of him) and let Lisa spend a year in the COO position gaining more experience before the promotion. The timing did mean everything, despite what a lot of people argued in advance of the earnings release and announcement of a fresh round of layoffs.
 
Idc, what do you think is keeping AMD alive? from what I have read they shouldn't have lasted this long? is it lucky debt management, decent industry relations? what do you think?
 
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