AMD Q1 2014 Quarterly Earnings Analysis
by Brett Howse on April 17, 2014 8:45 PM EST
AMD hosted their quarterly earnings conference call this afternoon to announce their financial results for the quarter ending March 2014. While they still reported a GAAP loss of $20 Million ($0.03 per share), year over year results showed a strong revenue gain of 28% and a substantial 86% increase in net income (though still a small loss).
| AMD Q1 2014 Financial Results (GAAP) | |||||
| Q1'2014 | Q4'2013 | Q1'2013 | |||
| Revenue | $1.40B | $1.59B | $1.09B | ||
| Net Income | -$20M | $89M | -$146M | ||
Gross margins were 35% for the quarter which was flat compared to Q4 2013. These margins are in-line with AMD’s stated goals, and while they’d no doubt appreciate greater margins right now, the long term plan is to be profitable with these margins.
Non-GAAP numbers were slightly higher, with a small profit of $12M, or $0.02 per share.
| AMD Q1 2014 Financial Results (Non-GAAP) | |||||
| Q1'2014 | Q4'2013 | Q1'2013 | |||
| Revenue | $1.40B | $1.59B | $1.09B | ||
| Net Income | $12M | $45M | -$94M | ||
The biggest decrease was in the Computing Solutions (CPUs & APUs) segment, where there was a decrease of 12% year-over-year, however the Graphics and Visual Solutions (GPUs & custom SoCs) segment had a huge year-over-year increase of 118% mostly due to semi-custom SoC production. This isn’t surprising with the very high sales of the Xbox One, and more so the PS4, both which have AMD silicon at the heart of their platform.
| AMD Q1 2014 Computing Solutions Division Financial Results | |||||
| Q1'2014 | Q4'2013 | Q1'2013 | |||
| Operating Income | -$3M | -$7M | -$39M | ||
GPU operating income also increased year-over-year up $75M with the release of the popular Radeon R7 and R9 products and strong Average Selling Prices of those devices. Sequentially, GPU operating income fell $30M due to a decrease in semi-custom SoC sales. This isn’t surprising, since the PS4 and Xbox One both arrived in Q4 2013 – complete with the major production ramp-up and stockpiling that a console launch entails – and were a large boost to AMD’s sales numbers for that quarter.
| AMD Q1 2014 Graphics and Visual Solutions Financial Results | |||||
| Q1'2014 | Q4'2013 | Q1'2013 | |||
| Operating Income | $91M | $121M | $16M | ||
Total debt combining long term and short term was up slightly at $2.14B, however Cash, cash equivalents, and marketable securities were hovering around the $1B mark which is where AMD wants to keep its cash reserves. This is in addition to making the final payment to GlobalFoundries of $200M for its previous wafer commitments for 2012, as well as fixing prices for their 2014 wafer purchases.
AMD is expecting a 3% revenue increase (plus or minus 3%) for the 2nd quarter this year.
Overall this is a decent quarter for AMD. Consensus earnings for Q1 was $0.00 per share non-GAAP, which AMD beat at $0.02 per share. AMD shares are up 5.96% in after-hours trading at this time.
Going forward, AMD is expected to bring its ARM 64 bit server architecture out this year, and is hoping to make inroads in the profitable server market.
Rory Read – AMD’s president and CEO – must be pretty happy with the new fiscal outlook. There was a time in 2012 where people weren’t sure if AMD was going to be able to pull through but strong GPU and SoC sales, coupled with cost savings in the CPU division have brought AMD back.
Source: AMD Earnings Release
Facebook
Twitter
RSS
37 Comments
View All Comments
evolucion8 - Thursday, April 24, 2014 - link
Unlike the Xbox 360 and the Wii which were using designed by ATI chips and only getting royalties, AMD this time is manufacturing the chips and giving them to Sony and Microsoft, plus royalties, its a much different scenario.tipoo - Friday, April 18, 2014 - link
I doubt that. Console margins are usually razor thin. A nice boost, but it's not going to carry the whole company.Gizmosis350k - Sunday, May 4, 2014 - link
Wii-UMetalliax - Thursday, April 17, 2014 - link
Quote: GPU revenue also increased year-over-year up $75M with the release of the popular Radeon R7 and R9 products and strong Average Selling Prices of those devices. Sequentially, GPU revenue fell $30M due to a decrease in semi-custom SoC sales.Please re-post this. Your numbers are based on Operating Income for the Graphics and Visual group, however you are stating the differences as if it's revenue (not op. income).
Also, AMD is expecting a 0-6% revenue increase (3% +/- 3%) not 3% total.
This article is a mess and should be rewritten or taken down for inaccuracies.
All in all, this was a really positive quarter for AMD and I look forward to Q2.
SetiroN - Thursday, April 17, 2014 - link
This.Metalliax - Friday, April 18, 2014 - link
Thanks for updating the article to be more accurate.Kjella - Thursday, April 17, 2014 - link
Their "Computing Solutions" division (CPU/APU/chipsets) revenue in 2012, 2013 and 2014: 1203, 751, 663 million, what used to be AMD is disappearing fast and is now less than half their revenue. The GPU business is stable and they have a big boost now from the consoles which also keeps them almost profitable, but their core business is still in big trouble and those PS4/XBone sales won't prop them up forever. Those R&D investments keep going down...TristanSDX - Friday, April 18, 2014 - link
They are amking profits only on chips for PS4 and XBONE. CPU/APU and GPU are profitless.Alexey291 - Friday, April 18, 2014 - link
So that's why their GPU division has shown consistent profits as far back as I remember.Because its profitless. Fair nuff.
jjj - Friday, April 18, 2014 - link
Actually the results are rather poor with one bright spot.CPU segment is so low nowadays, 2 years ago it was 1.2 billion, now just 663 million.
GPU (just the GPU w/o console) was up sequentially and that's surprising and good.
In console sure Sony did better than expected with some 2.8 units sold in Q1 and M$ sold maybe 1.7 mil units in Q1 but those are low margins for AMD and at some point soon enough sales will peak.
Wall Street might like the results enough but i don't think we should be all that happy with AMD's extinction in the CPU business.
As for the ARM SoCs, they are sampling it but only shipping in Q4 and relevant revenue wont come all that soon, plus they are on 28nm, others might be shipping 20nm soon enough.