AMD Q414 results

[mrmt]

Not good:

http://ir.amd.com/phoenix.zhtml?c=74093&p=irol-newsArticle&ID=2008997

Q4 2014 Results
Revenue of $1.24 billion, down 13 percent sequentially and 22 percent year-over-year.

Gross margin of 29 percent and non-GAAP(1) gross margin of 34 percent. Gross margin was down 6 percentage points sequentially, primarily due to lower of cost or market inventory adjustment of $58 million related to our second-generation APU products (AMD choking with inventory? This will be bad, Kumar said that inventory was fine last call). Non-GAAP(1) gross margin was down 1 percentage point sequentially. Q3 2014 gross margin of 35 percent included a $27 million, or 2 percent, benefit from revenue related to technology licensing.

Operating loss of $330 million and non-GAAP(1) operating income of $36 million, compared to operating income of $63 million and non-GAAP(1) operating income of $66 million in Q3 2014.

Net loss of $364 million, loss per share of $0.47, and non-GAAP(1) net income of $2 million, breakeven non-GAAP(1) earnings per share, compared to net income of $17 million, earnings per share of $0.02 and non-GAAP(1) net income of $20 million, non-GAAP(1) earnings per share of $0.03 in Q3 2014.

Cash, cash equivalents and marketable securities were $1.04 billion at the end of the quarter, up $102 million from the end of the prior quarter.

Total debt at the end of the quarter was $2.21 billion, flat from the prior quarter.

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Computing and Graphics segment revenue decreased 15 percent sequentially and 16 percent from 2013. The sequential decrease was primarily due to lower desktop processor and GPU sales, and the annual decrease was driven by lower desktop processor and chipset sales.

Operating loss was $56 million, compared with an operating loss of $17 million in Q3 2014 and operating loss of $15 million in Q4 2013. The sequential and year-over-year decreases were primarily driven by lower channel sales 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 increased sequentially primarily due to higher desktop and notebook GPU ASPs and decreased year-over-year primarily due to a lower channel ASP.

Enterprise, Embedded and Semi-Custom segment revenue decreased 11 percent sequentially primarily driven by lower sales of semi-custom SoCs. Annual revenue increased 51 percent from 2013 primarily driven by increased sales of semi-custom SoCs.

Operating income was $109 million compared with $108 million in Q3 2014 and $129 million in Q4 2013. The year-over-year decrease was primarily due to lower sales of semi-custom SoCs.

All Other category operating loss was $383 million compared with $28 million in Q3 2014 and operating income of $21 million in Q4 2013. The sequential and year-over-year decreases are primarily due to a $233 million goodwill impairment charge, $71 million restructuring and other special charges, net and a $58 million lower of cost or market inventory adjustment.


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Current Outlook

For Q1 2015, AMD expects revenue to decrease 15 percent, plus or minus 3 percent, sequentially. (More personnel cuts incoming, AMD is spending now $238MM in R&D, 2/3 of what Nvidia spends)

 

[ShintaiDK]

Ouch. R&D got a further cut with 40M$ down QoQ.

All divisions lost revenue. And 20-25% YoY losses.

And that Q1 2015 forecast. Its ugly.

 

[AnandThenMan]

It's been a heck of a ride AMD. :thumbsup: I can't think of another small company that has had so much impact on the computing industry, here's hoping they get bought up instead of being dismantled and fade into history.

 

[DooKey]

I don't care who you are, but this isn't good for AMD. 1st QTR 2015 projection just piles onto an already bad situation.

 

[AnandThenMan]

Its ugly.

Not for much longer.

 

[DooKey]

Not for much longer.

This time I believe you are right.

 

[Arachnotronic]

Huge miss on guidance. Ugly.

 

[AnandThenMan]

AMD's R3xx parts coming out summer-ish time could be one of the final nails in the coffin by then they'll probably be in the single digits for GPU share.

 

[DooKey]

AMD's R3xx parts coming out summer-ish time could be one of the final nails in the coffin by then they'll probably be in the single digits for GPU share.

That would be horrible. If that happens the IP will devalue tremendously. Look how NV was able to snap up 3DFX IP so cheaply when they went under. I could see Intel grabbing the ATI IP for a song.

 

[ShintaiDK]

Any IP may go to Imagination Technologies. It seems to be the graphics IP holder for some of the big companies.

 

[sontin]

Wow - Q1 could be the first time that nVidia and AMD have the same revenue. When you think about that AMD payed more than 5 billions for ATi this is really shocking.

 

[Arachnotronic]

Wow - Q1 could be the first time that nVidia and AMD have the same revenue. When you think that AMD payed more than 5 billions for ATi that is really shocking.

Same revenue, 60% the gross margins, heh.

NVIDIA is a well managed business. AMD is not. That's why even with solid GPU tech, AMD is still suffering.

 

[Zstream]

Yikes!

 

[mrmt]

AMD's R3xx parts coming out summer-ish time could be one of the final nails in the coffin by then they'll probably be in the single digits for GPU share.

Nail in the coffin will be Intel 14nm on volumes and Cherry Trail. Those will dislodge AMD from its traditional niches in the bottom market. The GPU business is far smaller than the CPU business, and cheaper to maintain, the CPU business is not, widening the losses on the CPU business will wreak havoc in AMD's balance sheet.

Ed: I think Lisa Su has one very important question to answer right now: Can AMD have a viable consumer CPU/SoC business?

 

[sontin]

/edit: Delete pls.

 

[Elixer]

Nothing too shocking in that report.
They are darn lucky that they have the PS4 & XB1 & Wii contracts, or it would have been a blood bath.

I don't think it is possible to sell AMD "as is" anymore, since once new owners get in, they lose their patent sharing with intel AFAIK.

That means, they are in dire need of killer products, the 3xx could help, but, they have no answer on the CPU front for another year or more.

They need to lower prices to move inventory, but that would mean more losses (unless they can get better terms from gloflo).

So, they are between a rock & a hard place.

 

[Abwx]

Nail in the coffin will be Intel 14nm on volumes and Cherry Trail. Those will dislodge AMD from its traditional niches in the bottom market.

As if these will cost less than already discussed ultra subsided baytrails,
or will intel double the subsides..?.

 

[III-V]

or will intel double the subsides..?.

This ignorant garbage doesn't belong here. It's amazing the crap people are able to get away with, now that neither ViRGE or Mark spend much time around here.

 

[mrmt]

That means, they are in dire need of killer products, the 3xx could help, but, they have no answer on the CPU front for another year or more.

Given that there will be more cuts by Kumar's own numbers (he says OPEX will be between 340MM and 370MM, current levels are 385MM), I don't think AMD will be able to develop its current product pipeline, at least not in the original timeframe, unless they find ways to make their employees work 5-10% more.

 

[Arachnotronic]

Nothing too shocking in that report.
They are darn lucky that they have the PS4 & XB1 & Wii contracts, or it would have been a blood bath.

I don't think it is possible to sell AMD "as is" anymore, since once new owners get in, they lose their patent sharing with intel AFAIK.

That means, they are in dire need of killer products, the 3xx could help, but, they have no answer on the CPU front for another year or more.

They need to lower prices to move inventory, but that would mean more losses (unless they can get better terms from gloflo).

So, they are between a rock & a hard place.

IMO, AMD should go all-in on trying to fight NVIDIA in GPUs while its technology is still competitive. For semi-custom and embedded, license ARM cores, no need to do in-house core development, and R&D is usually paid for upfront by the customer rather than by AMD.

AMD needs to buckle down and focus on what it's good at and where it can make money.

 

[AnandThenMan]

The biggest blunder by AMD in the last 10 years was not taking Intel to court, instead Derp Meyer settled for what amounts to pocket change for Intel. What an idiotic move, that's why you don't put engineers with no business sense in charge of a company.

Bottom line is AMD has failed not because a lack of good products but because a lack of business acumen.

 

[NTMBK]

Owch.

And 2015 isn't going to bring much relief. They're launching a ridiculous 300W GPU and, erm, that's about it as far as potentially profitable products go.

Samsung merger in 3, 2, 1...

 

[geokilla]

AMD has been dying ever since the Phenom II CPUs and the Tahiti GPUs stopped being relevant. Waiting for them to announce bankruptcy now.

 

[AnandThenMan]

This ignorant garbage doesn't belong here. It's amazing the crap people are able to get away with, now that neither ViRGE or Mark spend much time around here.

Huh? Nothing wrong with what he posted.

 

[mrmt]

The biggest blunder by AMD in the last 10 years was not taking Intel to court, instead Derp Meyer settled for what amounts to pocket change for Intel. What an idiotic move, that's why you don't put engineers with no business sense in charge of a company.

AMD settled because AMD was almost bankrupt at the time. Had AMD more cash (for example, not having burned all the cash they can for acquiring ATI) they would have settled in much better terms. The ATI acquisition paid in cash was a disaster of epic proportions for AMD.