AMD Posts Q1 2015 Results: $180 Million Net Loss
by Brett Howse on April 16, 2015 6:45 PM EST- Posted in
- CPUs
- AMD
- GPUs
- Financial Results
Today AMD released their Q1 FY 2015 financial results, and the company reported revenue of $1.03 billion for the quarter. This is a 16.9% decrease as compared to Q4 2014, and a 26.4% decrease from the $1.40 billion recorded in Q1 2014. Operating income based on GAAP numbers was an operating loss of $137 million, which is a substantial decrease in loss as compared to Q4 2014, where they had an operating loss of $330 million, however in Q1 2014 they had a small operating income of $49 million, so although they have improved quarter-over-quarter, that is a significant reduction year-over-year. Net loss for the quarter was $180 million, or $0.23 per share, which once again is better than Q4 2014 where there was a $364 million ($0.47/share) loss, but much worse than the $20 million ($0.03/share) loss in Q1 2014.
| AMD Q1 2015 Financial Results (GAAP) | |||||
| Q1'2015 | Q4'2014 | Q1'2014 | |||
| Revenue | $1.03B | $1.24B | $1.40B | ||
| Gross Margin | 32% | 29% | 35% | ||
| Operating Income | -$137M | -$330M | $49M | ||
| Net Income | -$180M | -$364M | -$20M | ||
| Earnings Per Share | -$0.23 | -$0.47 | -$0.03M | ||
Part of these losses are due to the ongoing restructuring at AMD, which has contributed heavily to these numbers. One of the new restructuring fees is due to the exit from the Seamicro branded dense server business, which has cost them an additional $75 million this quarter, including $7 million in cash. Due to these hits, AMD also provides Non-GAAP results which exclude these numbers. On a Non-GAAP basis, AMD’s operating loss is just $30 million, however that is still down significantly from the $89 million operating income in Q1 2014, and the $52 million operating income from last quarter. Net loss on a Non-GAAP basis is $73 million, or $0.09 per share. This is a decline from Q4 2014 where there was a net income of $18 million ($0.02/share) and Q1 2014 where they were able to achieve a net income of $35 million ($0.05/share).
| AMD Q1 2015 Financial Results (Non-GAAP) | |||||
| Q1'2015 | Q4'2014 | Q1'2014 | |||
| Revenue | $1.03B | $1.24B | $1.40B | ||
| Gross Margin | 32% | 34% | 35% | ||
| Operating Income | -$30M | $52M | $89M | ||
| Net Income | -$73M | $18M | $35M | ||
| Earnings Per Share | -$0.09 | $0.02 | $0.05M | ||
AMD has also entered into a fifth amendment of their agreement with GlobalFoundries, and AMD is expecting to purchase about $1 billion in wafers in 2015.
Breaking down their product segments, the Computing and Graphics segment had a 20% decline in revenue quarter-over-quarter, and a 38% decrease year-over-year, with Q1 having net revenues of $532 million. The quarterly decrease was due to lower desktop and notebook processor sales, whereas the yearly decrease was due to lower desktop processor sales and GPU channel sales. The division had an operating loss of $75 million for the quarter, which is a significant change from the $56 million loss last quarter and the $3 million income in Q1 2014. The loss was partially offset by lower operating expenses, but clearly more work is needed. AMD is hoping for better success with their new APU, Carrizo, which they are expecting to deliver double digit performance increases and much better energy efficiency compared to Kaveri, which is the current APU.
| AMD Q1 2015 Computing and Graphics | |||||
| Q1'2015 | Q4'2014 | Q1'2014 | |||
| Revenue | $532M | $662M | $861M | ||
| Operating Income | -$75M | -$56M | $3M | ||
The Enterprise, Embedded and Semi-Custom segment had a year-over-year revenue decrease of 7%, and a quarter-over-quarter decrease of 14%, with Q1 2015 coming in at $498 million. The quarterly drop is due to a seasonal decrease in semi-custom SoC sales (read: Consoles had a ramp up for the holidays and are now back to lower sales) and the yearly decrease is due to lower numbers of server processors being sold. However this segment did have an operating income to report of $45 million for the quarter, but this is down from the $109 million in Q4 2014 and $85 million in Q1 2014.
| AMD Q1 2015 Enterprise, Embedded and Semi-Custom | |||||
| Q1'2015 | Q4'2014 | Q1'2014 | |||
| Revenue | $498M | $577M | $536M | ||
| Operating Income | $45M | $109M | $85M | ||
The “All Other” segment had an operating loss of $107 million. As compared to Q1 2014, this is $68 million more operating loss, which is primarily due to the $75 million hit for exiting the dense server business. In Q4 2014 this segment had a $383 million loss.
For Q2, AMD is forecasting revenue being down an additional 3%, plus or minus 3%, and non-GAAP Gross Margin to remain flat at 32%.
AMD is certainly not in a great position right now, and the new CEO Dr. Lisa Su has some work to do in order to get AMD back to a financially viable state. Part of that is diversifying revenues, especially with the PC market slowing again. AMD has not had a significant product launch in a few quarters, which has not helped either.
Source: AMD Investor Relations
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Klimax - Friday, April 17, 2015 - link
When will people stop asserting clearly wrong things. Not going to happen. There is already quite significant barrier for Intel called "good enough", if they would increase price, they would lose even more. Basic logic and economics.And it is not like AMD didn't have high price when they could get away with... (see Black edition CPUs during P4 era)
silverblue - Friday, April 17, 2015 - link
Weren't Intel charging similarly high prices then as well?chizow - Friday, April 17, 2015 - link
Nope, despite Intel's dominance for most of the past decade since Core 2 Duo, they have still offered me outstanding relative performing CPUs at $300 or less.silverblue - Friday, April 17, 2015 - link
I'm clearly referring to the P4 era. The P4 3.46EE was $999, and that wasn't even the top of the pile. Still, the 3800+ was overpriced compared to the P4 560.http://www.anandtech.com/show/1529/16
chizow - Friday, April 17, 2015 - link
Intel's EE was a market reaction to the $800-1000 Athlon FX chips that dominated the era and sold poorly as it had all the problems of Netburst with just higher FSB but clockspeeds you could achieve with most any Prescott.http://www.anandtech.com/show/1335/2
How quickly people forget that when AMD had market leading performance, they made sure to charge you for the privilege.
silverblue - Saturday, April 18, 2015 - link
It's not about forgetting. I know how much they charged. Ironically, it was Intel releasing Conroe and dropping prices significantly for mainstream CPUs which lead to our current state of great performance without needing to spend a fortune on it. CPUs like the E4300 were a revelation.Not having the IPC lead and the ability to charge more than $500 for a CPU reined in AMD as well.
chizow - Saturday, April 18, 2015 - link
Yes and that was my point to begin with, despite nearly a decade of dominance on the CPU side since Core 2 Conroe'd AMD, we still have that same level of affordable, outstanding performance CPUs despite all these anti-monopoly claims to the contrary.How does that happen if monopoly is bad and everyone needs AMD to thrive in order for us to get cheap goods? Its rubbish theory that doesn't hold truth outside of econ101 classes, that's how it happens.
FlushedBubblyJock - Saturday, April 25, 2015 - link
siilverblue.... try honesty pleaseAMD, overclock rebrand, RECENT
220 watt FX5950 (aka fx8350 overclocked)
$800.00 ON RELEASE.
Now what was that about way back when yesteryear ?
JumpingJack - Saturday, April 18, 2015 - link
The EE is top of the pile, it was P4 so it was a pile of you know what, but EE historically was always Intel's $999 processor (even though it was laughably not worth that when compared to AMD's EE version -- an FX-57 or FX-60 which BTW were also $999 CPUs.). No, in fact, when AMD had the upper hand, they routinely priced it higher.Example quote: "The cheapest dual core Pentium D processor could be had for under $300, yet AMD's cheapest started at $537. Intel was effectively moving the market to dual core, while AMD was only catering to the wealthiest budgets. " http://www.anandtech.com/show/1745 it wasn't until the x2 3800+ came out that AMD populated affordable price points.
Yes, indeed, AMD gouged the fan base every bit as much as you would expect Intel given they had a lead.
silverblue - Saturday, April 18, 2015 - link
The Athlon64 was a dual edged sword. On one hand, it was significantly faster - outside of encoding - than the P4, whilst using less power due to being clocked much lower, but on the other hand, AMD didn't consider its follow-up properly. Had the P4 not been an Intel CPU, it would've bombed massively and never had developers trying to work every little bit of power out of it. Likewise, had Bulldozer been an Intel design...AMD couldn't produce enough CPUs for demand, so whilst I don't like their mid-2000s pricing, I don't completely disagree with it, either. I didn't buy a CPU during that era as my little Athlon XP 2500+ was still doing well enough, but thanks to Core 2's dominance, my PII X3 710 was a third of the price that it would've been had Core 2 not been the success that it was, so I do have Intel to thank as well.