After posting a fourth quarter 2013 profit of $89 million AMD is back to its old antics as the company's financial performance swing into the red once more. For the first quarter of the year, AMD posted a net loss of $20 million on a revenue of $1.40 billion. This compares to a revenue of $1.09 billion and a net loss of $146 million in the first quarter of 2013.
The increase in revenue is primarily driven by sales of console chips and an increase in the average selling price of GPUs. Sales of processors on the other hand were down 12 percent year-over-year due to declining client demand. Other than that, a $200 million cash payment to Globalfoundries related to the reduction of the "take or pay" wafer obligation commitments for 2012 also had a large impact on the results.
AMD's shares rose 5.96 percent to $3.91 in afterhours trading as the financial results and forecast for the current quarter came in above analysts' expectations.
AMD (NYSE:AMD) today announced revenue for the first quarter of 2014 of $1.40 billion, operating income of $49 million and net loss of $20 million, or $0.03 per share. The company reported non-GAAP operating income of $66 million and non-GAAP net income of $12 million, or $0.02 per share.
"AMD continued our momentum by building on the solid foundation we set in the second half of 2013, further transforming the company," said Rory Read, AMD president and CEO. "Backed by our powerful x86 processor cores and hands-down best graphics experiences, we achieved 28 percent revenue growth from the year-ago quarter. We are well positioned to continue to grow profitably as we diversify our business and enable our customers to drive change and win."
Quarterly Financial Summary:
Gross margin was 35 percent in Q1 2014.
- Gross margin was flat sequentially.
Cash, cash equivalents and marketable securities, including long-term marketable securities, were $982 million at the end of the quarter, close to the optimal balance of $1 billion and well above the target minimum of $600 million.
- In Q1 2014, AMD made the final $200 million cash payment to GLOBALFOUNDRIES related to the reduction of the "take or pay" wafer obligation commitments for 2012.
Total debt, long-term and short-term, at the end of the quarter was $2.14 billion, up from $2.06 billion in Q4 2013.
- During Q1 2014, AMD focused on re-profiling its near-term debt maturities. The company issued $600 million in aggregate principal value of 6.75% Senior Notes due 2019, utilizing proceeds to repurchase approximately $423 million aggregate principal amount of its 6.00% Convertible Senior Notes due 2015 and approximately $48 million aggregate principal amount of its 8.125% Senior Notes due 2017 during the quarter.
- Additionally, AMD repurchased approximately $64 million aggregate principal amount of its 6.00% Convertible Senior Notes due 2015 in the open market utilizing cash balances in Q1 2014.
Computing Solutions segment revenue decreased 8 percent sequentially and 12 percent year-over-year. The sequential and year-over-year declines were due to decreased client unit shipments.
- Operating loss was $3 million, an improvement from an operating loss of $7 million in Q4 2013 and $39 million in Q1 2013 driven by lower operating expenses.
- Microprocessor average selling price (ASP) was flat sequentially and decreased slightly year-over-year.
Graphics and Visual Solutions segment revenue decreased 15 percent sequentially and increased 118 percent year-over-year driven largely by semi-custom SoCs. GPU revenue increased sequentially and year-over-year due to strong demand for the AMD Radeon™ R7 and R9 family of products.
- Operating income was $91 million compared with $121 million in Q4 2013 and $16 million in Q1 2013. The sequential decline was primarily due to decreased revenue from semi-custom SoCs while the year-over-year increase was driven by higher sales of semi-custom SoCs.
- GPU ASP increased sequentially and year-over-year driven by the Radeon™ R7 and R9 family of products.