AMD second-quarter net loss shrinks to $40 million

AMD announced a second-quarter non-GAAP net loss of $40 million, or 5 cents a share, on revenue of $1.027 billion. Revenue is up 8.3 percent year-over-year, primarily due to higher sales of semi-custom SoCs. The reported figures compare favorable to analyst estimates, which projected a loss of 8 cents per share and revenue of $0.958 billion.

A closer look at the data reveals revenue of the computing and graphics segment accounted for $435 million, down 5 percent versus the previous quarter but up 15 percent versus the year ago period. Enterprise, embedded and semi-custom sales on the other hand came in at $592 million, up 59 percent sequentially and 5 percent year-over-year.

AMD expects third-quarter revenue will be up 18 percent sequentially, plus or minus 3 percent.

AMD (NASDAQ: AMD) today announced revenue for the second quarter of 2016 of $1,027 million, operating loss of $8 million, and net income of $69 million, or $0.08 per diluted share. Non-GAAP (1) operating income was $3 million and non-GAAP (1) net loss was $40 million, or $0.05 per share.

"In the second quarter we accomplished a significant milestone as we returned to non-GAAP operating profitability based on solid execution and strong demand for our semi-custom and graphics products," said Lisa Su, AMD president and CEO. "Based on the strength of our semi-custom products and demand for our latest Radeon RX GPUs and 7th Generation A-Series APUs, we are well positioned to drive growth and market share gains in the second half of the year."

Q2 2016 Results
Q2 2016, Q1 2016 and Q2 2015 were 13-week fiscal quarters.

Revenue of $1,027 million, up 23 percent sequentially and up 9 percent year-over-year primarily due to higher sales of semi-custom SoCs.

Gross margin of 31 percent, down 1 percentage point sequentially, due primarily to a higher mix of semi-custom SoC sales.

Operating expenses of $353 million, compared to $344 million for the prior quarter. Non-GAAP operating expenses of $342 million, compared to non-GAAP operating expenses of $332 million in Q1 2016, primarily due to increased marketing investments.

Operating loss of $8 million, compared to an operating loss of $68 million in Q1 2016. Non-GAAP(1) operating income of $3 million, compared to non-GAAP(1) operating loss of $55 million in Q1 2016, primarily due to higher sales.

Net income of $69 million, earnings per share of $0.08, and non-GAAP(1) net loss of $40 million, non-GAAP(1) loss per share of $0.05. This is compared to a net loss of $109 million, loss per share of $0.14 and non-GAAP(1) net loss of $96 million, non-GAAP(1) loss per share of $0.12 in Q1 2016. The GAAP sequential and year-over-year improvements were primarily due to a gain of $150 million related to the formation of our assembly, test, mark and pack (ATMP) joint venture (JV) with Nantong Fujitsu Microelectronics Co., Ltd. (NFME), partially offset by related taxes of $27 million. The non-GAAP sequential and year-over-year improvements were primarily due to higher sales and an IP licensing gain.

Cash and cash equivalents were $957 million at the end of the quarter, up $241 million from the end of the prior quarter, primarily due to net cash proceeds received from the ATMP JV transaction with NFME which closed in Q2 2016.

Total debt at the end of the quarter was $2.24 billion, flat from the prior quarter.

At press time, AMD shares are trading at $5.47 (+4.79%) in after-hours trading.