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AMD Reports 2014 First Quarter Results: Net loss of $20 million

l2ez4m said:
The most disappointing thing about Amd is that despite all those stupendous console wins and sales
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To be fair they will have only won those console sales because (as well as offering half-decent APU's) they are cheap, volume of sales aside I doubt their profits will be anything massive.. nothing like what NVidia got from the original Xbox and PS3 anyway.
 
Given you don't know what the financial arrangements are between AMD and its customers I don't know how you can come out and say that. Read the summary in FS, AMD's Graphics and Visual Solutions posted 118% increase in turnover thanks to AMD's deals with Microsoft and Sony which if you compare q1 2013 results to q1 2014 clearly played part in improved financial performance.
 
On the market AMD are at this point $0.04 short of hitting a 52 Week high. up 11% today alone, they were up 12% before Easter when this news hit.

Why.

Well...


AMD's Turnaround Is Real

Summary

  • Following AMD's earnings report, the stock popped by 5% after hours.
  • The report made clear that AMD's console sales were not a fluke and can help sustain AMD in 2014.
  • PC sales remain a weak spot as Intel continues to successfully exploit its process advantage.
  • I expect that process advantage to be negated once Global Foundries and other ARM foundries put their own 14 nm FinFET processes into production.
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AMD (AMD) rewarded investors' patience with an after-hours pop of about 5% following its calendar 2014 Q1 earnings release. AMD posted strong revenue growth of 28% y/y to $1.4 billion, beating analysts' consensus of $1.34 billion. AMD also posted an operating profit of $49 million but a GAAP net loss of $20 million due mostly to severance packages and debt refinancing. Non-GAAP net income was $12 million, also exceeding analysts' expectations of breakeven.

Patience Rewarded
AMD investors have come to expect negative market reactions to its earnings reports, so we were pleasantly surprised by the afterhours uptick. This reflects a growing awareness that AMD's recent return to profitability (net GAAP income of $0.12 in 2013 Q4) was not merely a short lived fluke. Although I've always acknowledged that AMD was a risky investment, I felt it had long-term potential as a turnaround story.
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Advanced Micro Devices Set To Grow

Summary

  • The financial position of the company is good, which should support the turnaround efforts over the next few months.
  • The focus on high-growth areas will support future revenue growth for the company.
  • A change in the revenue mix with the focus on high-margin areas will result in improved margins over the next few quarters.
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Advanced micro Devices (AMD) has seen a lot of ups and downs over the last few months. However, the overall trend in the stock price has been positive during the period - the stock is up over 50% during the last twelve months. The company is going through a turnaround and it is finally coming back to profitability. Since last year, the company has shown interesting product launches representing research and development costs well spent. The financial position of the company is getting better and the revenue growth is impressive as the company announced first quarter results.

A Look at the Financials
The company announced its first quarter results yesterday - revenue for the first quarter was down 12%, sequentially. However, the year-over-year growth in revenues was impressive at 28%. The revenues in the fourth quarter of the last year were higher due to the launch of gaming consoles by Microsoft (MSFT) and Sony (SNE). Sony reported that it sold 7 million PS4 consoles in the first four months, which is twice as much as PS3 sold in the same time. More importantly, the company's operating profit margin improved significantly. In the same period last year, the company had a $98 million operating loss on $1.09 billion of revenue. In the first quarter, the company produced $49 million of operating profits on $1.4 billion of revenue. This was mainly possible because of the company's strategy of its high growth product transition. In 2012, the company's revenue comprised of only 9% from high growth markets and 91% from the traditional mature or declining markets - in 2013, this ratio became 30/70. The company expects to take this ratio to 50/50 by 2015. Focus on high growth areas will continue to drive the revenue growth over the next few quarters.
Despite impressive revenue growth, the company was not able to report a profit, and the net loss for the quarter stood at $20 million, or $0.03 per share. Nonetheless, the changes in the revenue mix should allow the company to report profits in the medium to long term. The cash position of the company is extremely strong, which is important for a company making a turnaround. AMD had $982 million in cash and cash equivalents, well above the minimum limit of $600 million set by the company. The company also issued new debt securities worth $600 million at 6.75% - the proceeds were used to buy back $423 million worth of convertible notes yielding 6%. The company also repurchased $48 million worth of senior notes and $64 million worth of convertible notes, yielding 8.125% and 6%, respectively. As a result, of this bond issue, the interest expense of the company should go up. For the first quarter, interest expense for AMD went up by $3 million. The growth in the graphics segment remains extremely impressive - the company recorded year-over-year growth of 118% for this segment - however, sequentially, the revenues were down 15%.
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A reality check for this Gloom thread.
 
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"other ARM foundries" - ARM doesn't own any foundries, ARM Holdings plc is a intellectual property company, they provide the brains behind the designs of the chips and thn licence those designs to others to manufacture.
 
LtMatt said:
12.7% bump in amd shares today. What gives?

http://seekingalpha.com/article/2149453-advanced-micro-devices-set-to-grow
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Look above you... :)

AMD are growing in high growth markets, they have paid the final payment ($200) to GloFo for the 2012 Wafer Debt, AMD's overall financial situation is healthy, revenues are up 30%, future outlook is good...

Those who actually know what they are talking about have every reason to feel good about AMD.

Those who don't only see the $20 loss and thats as far as their understanding of these things go.

This why the markets are reacting with positivity while journalists with no understanding in any of this are all gloom.
 
daveip said:
I'd like to see this! Low power APU ... yes please!
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They've recently made a statement that they're not willing to go to the same price levels as Intel (Apparently there's some subsidising in there, but Windows tablets need that right now)

I can't find a single Temash tablet.

Shame really, as a 1080p AMD powered tablet would be interesting.

My brother has a C-50 powered tablet, and now GPU decoding works with Steam Streaming, well, even though he's only 720, gaming on it is absolutely flawless.

There is an AMD based tablet from Fuji, but it looks absolutely terrible and it's costly and it's Honda, which is just a C-50 revision, given you can get a HP Omni 10 for 330, it's like a few hundred quid overpriced.
 
Freddie1980 said:
Once consumers get serious about Windows tablets.
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They're starting to. X86 ones that is.
And you need the products first really, the first Windows RT tablets were poor, so even though people may have been interested, you'd be silly to have bought one.

The first lot of X86 tablets were overpriced (Except perhaps the i5 stuff in contrast to Ultrabooks)

But now you've got X86 8" tablets at 200+, and they really are competitors to Android.

AMD make noise about tablets, but they've never really done anything to break into them except produce a chip that's barely used (A chip that could be useful unfortunately)

AMD's stated they're not willing to match Intel/Android at the lower levels (At least has been reported)
 
AMD had to make a final payment of $200 million to GF,which is why they ended up making a loss this quarter.

Martini1991 said:
AMD's stated they're not willing to match Intel/Android at the lower levels (At least has been reported)
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Thats because Intel is spending $1billion this year alone in subsidies for phone and tablet versions of Bay Trail. The whole group which handles Atom and industrial computing is making 100s of millions of dollars of losses each quarter(at least $900million in the last quarter). Desktop,laptop and server sales are what is subsidising Intel in mobile.
 
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CAT-THE-FIFTH said:
Thats because Intel is spending $1billion this year alone in subsidies for phone and tablet versions of Bay Trail. The whole group which handles Atom and industrial computing is making 100s of millions of dollars of losses each quarter. Desktop,laptop and server sales are what is subsidising Intel in mobile.
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I've read, but it's the only thing propping Windows tablets up, and Windows tablets are very good.

Nothing better than full PC gaming on 10" :p
 
Sadly AMD cannot match the subsidies and losses in mobile which Intel are sustaining ATM. However,a few months ago there was some noise from an AMD person about AMD making ARM based phone/tablet chips - if this happens I expect they will be ARM based,just like with the new one being released at the end of the year. OTH,its probably better AMD does not enter that market unless they have something decent - companies like Rockchip sell their SOCs for very low margins. AMD would not need to take on Qualcomm and Samsung for the higher margin SOCs. OTH,they do have a lot of experience in CPU and GPU design though. However,Nvidia has made losses with its Tegra division so it is highly competitive.
 
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Martini1991 said:
I've read, but it's the only thing propping Windows tablets up, and Windows tablets are very good.

Nothing better than full PC gaming on 10" :p
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Asus had the best Windows tablet/laptop as CES last year, it was a Core i5 based Windows 8 tablet which at the press of button would switch to running Google Android. That for me was the only Windows tablet I've seen that really caught my eye such a shame that Microsoft and Google put their foot down and demanded that Asus scrap the product.
 
Freddie1980 said:
Asus had the best Windows tablet/laptop as CES last year, it was a Core i5 based Windows 8 tablet which at the press of button would switch to running Google Android. That for me was the only Windows tablet I've seen that really caught my eye such a shame that Microsoft and Google put their foot down and demanded that Asus scrap the product.
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The likes of MS and Google have got far to big, its not good for consumers if there are only one or two providers, we are defiantly getting bent over by them.
 
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