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AMD posts Q4 2016 net loss of $8 million

Posted on Tuesday, January 31 2017 @ 22:44:27 CET by


AMD logo
AMD's fourth quarter financial results just rolled off the wire. Not a lot too get excited about, the company posted a revenue of $1.11 billion and a net loss of $51 million. On an adjusted basis, which uses non-GAAP methods to filter out what a company deems one-time items, AMD posted a net loss of $8 million, which comes down to a loss of 1 cent per share. The results are a little bit better than Wall Street expected, revenue beat by $40 million and the non-GAAP loss was 1 cent per share better than expected.

Compared with the year ago period, revenue was up 15 percent, primarily due to higher GPU sales. Sales of the Computing and Graphics segment were up 28 percent year-over-year while revenue of the Enterprise, Embedded and Semi-Custom segment rose 4 percent.

For the full year of 2016, AMD reported revenue of $4.27 billion, up 7 percent versus the year before. The net loss came in at $497 million on a GAAP basis and $117 million once you filter out the one-time items. More in-depth figures are provided in the press release below.

For the current quarter, AMD expects revenue to decrease 11 percent sequentially, plus or minus 3 percent. The midpoint of the guidance would result in Q1 2017 revenue that's about 18 percent higher than Q1 2016. AMD says Ryzen will ship early March but it seems the chip is not expected to pull in a lot of revenue just yet. According to the latest rumors, we may see initial availability in March but mass availability of the more affordable parts could be delayed to May.

AMD's CFO doesn't provide detailed guidance for the full year 2017 but says the company expects "to grow annual revenue, expand gross margin and deliver non-GAAP net income".

At press time, AMD shares are trading 4.44% higher in after-hours trading at $10.83 per share.
AMD (NASDAQ: AMD) today announced revenue for the fourth quarter of 2016 of $1.11 billion, operating loss of $3 million and net loss of $51 million, or $0.06 per share. Non-GAAP(1) operating income was $26 million, non-GAAP(1) net loss was $8 million and non-GAAP(1) loss per share was $0.01.

"We met our strategic objectives in 2016, successfully executing our product roadmaps, regaining share in key markets, strengthening our financial foundation, and delivering annual revenue growth," said Dr. Lisa Su, AMD president and CEO. "As we enter 2017, we are well positioned and on-track to deliver our strongest set of high-performance computing and graphics products in more than a decade."

Q4 2016 Results
  • Q4 2016 was a 14-week fiscal quarter compared to 13-week fiscal quarters for Q3 2016 and Q4 2015. Revenue of $1.11 billion was up 15 percent year-over-year, primarily due to higher GPU sales. Revenue was down 15 percent sequentially, primarily driven by seasonally lower sales of semi-custom SoCs.
  • On a GAAP basis, gross margin was 32 percent, up 2 percentage points year-over-year and up 27 percentage points sequentially as Q3 2016 gross margin was negatively impacted by a $340 million charge (WSA charge) related to the sixth amendment of the wafer supply agreement with GLOBALFOUNDRIES. Operating loss was $3 million compared to an operating loss of $49 million a year ago and an operating loss of $293 million in the prior quarter. The year-over-year improvement was primarily due to higher revenue and IP monetization licensing gain while the sequential improvement is primarily due to the absence of the WSA charge offset by lower fourth quarter revenue. Net loss was $51 million compared to a net loss of $102 million a year ago and net loss of $406 million in the prior quarter. Loss per share was $0.06 compared to a loss per share of $0.13 a year ago and loss per share of $0.50 in the prior quarter.
  • On a non-GAAP(1) basis, gross margin was 32 percent, up 2 percentage points year-over-year and up 1 percentage point sequentially primarily due to higher Computing and Graphics segment revenue. Operating income was $26 million compared to an operating loss of $39 million a year ago and operating income of $70 million in the prior quarter. Operating income was lower in the current quarter due to lower revenue. Net loss was $8 million compared to net loss of $79 million a year ago and net income of $27 million in the prior quarter. Loss per share was $0.01 compared to a loss per share of $0.10 a year ago and earnings per share of $0.03 in the prior quarter.
  • Cash and cash equivalents were $1.26 billion at the end of the quarter, up $6 million from the end of the prior quarter.

    2016 Annual Results
  • Revenue of $4.27 billion, up 7 percent on an annual basis, increased in both reportable segments.
  • On a GAAP basis, gross margin was 23 percent, down 4 percentage points from the prior year primarily due to the WSA charge. Operating loss was $372 million compared to an operating loss of $481 million in the prior year. Operating loss improvement was due to higher revenue, lower restructuring charges, and an IP monetization licensing gain, offset by the WSA charge. Net loss was $497 million compared to a net loss of $660 million in the prior year. Loss per share was $0.60 compared to a loss per share of $0.84 in 2015.
  • On a non-GAAP(1) basis, gross margin was 31 percent, up 3 percentage points year-over-year primarily due to improved product mix and an inventory write-down recorded in Q3 2015. Operating income was $44 million compared to an operating loss of $253 million in the prior year. Operating income improvement was primarily related to higher revenue and the IP monetization licensing gain. Net loss was $117 million compared to a net loss of $419 million in the prior year. Loss per share was $0.14 compared to a loss per share of $0.54 in 2015.
  • Cash and cash equivalents were $1.26 billion at the end of the year, up from $785 million at the end of the prior year.

    Quarterly Financial Segment Summary
  • Computing and Graphics segment revenue was $600 million, up 28 percent year-over-year and 27 percent sequentially. The year-over-year increase was primarily driven by higher GPU sales. The sequential increase was primarily due to higher GPU and client processor sales.
  • Operating loss was $21 million, compared to an operating loss of $99 million in Q4 2015 and an operating loss of $66 million in Q3 2016. The year-over-year and sequential improvements were driven primarily by higher revenue.
  • Client average selling price (ASP) was down year-over-year driven by desktop processors, and down sequentially driven by desktop and mobile processors.
  • GPU ASP increased year-over-year due to higher desktop and professional graphics ASPs. GPU ASP increased sequentially due to higher mobile and professional graphics ASPs.
  • Enterprise, Embedded and Semi-Custom segment revenue was $506 million, up 4 percent year-over-year primarily driven by higher embedded and semi-custom SoC revenue. Sequentially, revenue decreased 39 percent due to seasonally lower sales of semi-custom SoCs.
  • Operating income was $47 million compared to $59 million in Q4 2015 and $136 million in Q3 2016. The year-over-year decrease was primarily driven by higher R&D investments in Q4 2016, partially offset by an IP monetization licensing gain. The sequential decrease was primarily due to seasonally lower sales of semi-custom SoCs.
  • All Other operating loss was $29 million compared with an operating loss of $9 million in Q4 2015 and an operating loss of $363 million in Q3 2016. The year-over-year operating loss increase was primarily related to higher stock-based compensation charges in Q4 2016. The sequential improvement was primarily due to the absence of the WSA charge.

    Current Outlook
    AMD's outlook statements are based on current expectations. The following statements are forward-looking, and actual results could differ materially depending on market conditions and the factors set forth under "Cautionary Statement" below.

    For Q1 2017, AMD expects revenue to decrease 11 percent sequentially, plus or minus 3 percent. The midpoint of guidance would result in Q1 2017 revenue increasing approximately 18 percent year-over-year. For additional details regarding AMD's results and outlook please see the CFO commentary posted at quarterlyearnings.amd.com.




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