AMD announced fourth quarter of 2015 revenue of $958 million and a net loss of $102 million. Excluding one-time items, the company's loss came in at $79 million, or a loss of $0.10 per share. The firm's revenue, which collapsed 23 percent versus the year ago period, was slightly better than analyst estimates, while the loss per share was in-line with expectations.
For the full year, AMD reported revenue of $3.39 billion, down from $5.51 billion in 2014, and a non-GAAP net loss of $419 million, or $0.54 per share, versus net income of $132 million, or $0.16 per share in 2014.
The firm's steep revenue loss was primarily the result of lower client processor sales, which is no big surprise given AMD's lackluster processor portfolio, as well as seasonally weak demand for game consoles. No positive change is expected anytime soon and the survival of the processor division will likely depend on how well the upcoming Zen architecture sells. AMD shares have fallen to $1.82 in after-hours trading, a decline of 6.67 percent, as investors got spooked by the weak Q1 2016 forecast. AMD expects its first quarter revenue will be down 14 percent, plus or minus 3 percent, quarter-over-quarter due to console seasonality and the weak macro environment in China. Analysts consensus called for a 6 percent drop so this is a pretty significant miss.
Due to the way AMD reports its results, it is unknown how the firm's processor division is performing. The Computing and Graphics segment reported fourth-quarter revenue of $470 million, up 11 percent sequentially but down 29 percent year-over-year, while the Enterprise, Embedded and Semi-Custom division saw sales of $488 million, a decline of 23 percent sequentially and 15 percent year-over-year.
AMD's shares have had a pretty wild ride in recent months. After nearly doubling from a low of $1.61 in July 2015 to $3 in December 2015, shares have once again fallen off a cliff.
AMD (NASDAQ: AMD) today announced revenue for the fourth quarter of 2015 of $958 million, operating loss of $49 million and net loss of $102 million, or $0.13 per share. Non-GAAP(1) operating loss was $39 million, non-GAAP(1) net loss was $79 million and non-GAAP(1) loss per share was $0.10.
"AMD closed 2015 with solid execution fueled by the second straight quarter of double-digit percentage revenue growth in our Computing and Graphics segment and record annual semi-custom unit shipments," said Dr. Lisa Su, AMD president and CEO. "While 2015 was challenging from a financial perspective, key R&D investments and a sharpened focus on innovation position us well to deliver great products, improved financial results and share gains in 2016."
2015 Annual Results
Revenue of $3.99 billion, down 28 percent year-over-year, primarily due to lower client processor sales.
Gross margin of 27 percent, down 6 percentage points year-over-year and non-GAAP(1) gross margin of 28 percent, down 7 percentage points year-over-year. The year-over-year declines were primarily due to lower unit volumes and product mix.
Operating loss of $481 million and non-GAAP(1) operating loss of $253 million, compared to a loss of $155 million and non-GAAP(1) operating income of $316 million in 2014 primarily due to lower revenue and gross margin.
Net loss of $660 million, loss per share of $0.84, and non-GAAP(1) net loss of $419 million, non-GAAP(1) loss per share of $0.54, compared to a net loss of $403 million, loss per share of $0.53, and non-GAAP(1) net income of $132 million, non-GAAP(1) earnings per share of $0.16 in 2014.
Q4 2015 Results
Revenue of $958 million, down 10 percent sequentially primarily driven by seasonally lower sales of semi-custom SoCs and down 23 percent year-over-year, primarily due to lower client processor sales.
Gross margin of 30 percent, up 7 percentage points sequentially. Q3 2015 gross margin was negatively impacted by an inventory write-down of $65 million, or 6 percentage points. Excluding the Q3 2015 inventory write-down, non-GAAP gross margin improved 1 percentage point sequentially, primarily due to improved product mix in the Computing and Graphics segment.
Operating loss of $49 million, compared to an operating loss of $158 million for the prior quarter. Non-GAAP(1) operating loss of $39 million, compared to non-GAAP(1) operating loss of $97 million in Q3 2015, primarily due to higher gross margin and lower operating expenses.
Net loss of $102 million, loss per share of $0.13, and non-GAAP(1) net loss of $79 million, non-GAAP(1) loss per share of $0.10, compared to a net loss of $197 million, loss per share of $0.25 and non-GAAP(1) net loss of $136 million, non-GAAP(1) loss per share of $0.17 in Q3 2015.
Cash and cash equivalents were $785 million at the end of the quarter, up $30 million from the end of the prior quarter, primarily due to improved operating cash flow.
Total debt at the end of the quarter was $2.26 billion, flat from the end of the prior quarter.
Quarterly Financial Segment Summary
Computing and Graphics segment revenue of $470 million, an increase of 11 percent sequentially and a decrease of 29 percent from Q4 2014. The sequential increase was primarily due to higher notebook processor sales, and the year-over-year decrease was primarily driven by lower client processor sales.
Operating loss was $99 million, compared to an operating loss of $181 million in Q3 2015 and an operating loss of $56 million in Q4 2014. The sequential improvement was driven primarily by higher sales and the absence of a Q3 2015 inventory write-down and the year-over-year decrease was primarily driven by lower sales.
Client average selling price (ASP) increased sequentially driven by a richer notebook processor product mix and decreased year-over-year due to a lower notebook processor ASP.
GPU ASP increased sequentially and year-over-year primarily due to a higher AIB channel ASP.
Enterprise, Embedded and Semi-Custom segment revenue of $488 million, a decrease of 23 percent sequentially primarily driven by seasonally lower sales of semi-custom SoCs. Revenue decreased 15 percent from Q4 2014 primarily driven by lower game console royalties, and server and embedded revenue.
Operating income was $59 million compared with $84 million in Q3 2015 and $109 million in Q4 2014. The sequential decrease was primarily due to seasonally lower sales of semi-custom SoCs. The year-over-year decrease was primarily due to lower game console royalties, and server and embedded sales.
All Other operating loss was $9 million compared with operating losses of $61 million in Q3 2015 and operating loss of $383 million in Q4 2014. The sequential improvement was primarily due to Q3 2015 restructuring and other special charges and the year-over-year improvement was primarily due to the absence of a goodwill impairment charge, lower restructuring and other special charges, net and a Q4 2014 lower of cost or market inventory adjustment.