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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chizow - Friday, April 17, 2015 - link
Yep, it has gotten to the point they aren't just cutting expenses, they are cutting engineering and R&D resources in some of their core competencies. Casting Sea Micro adrift was probably a good idea because it was bleeding money, but that was good money they spent at a time they simply couldn't afford it. Ironically, it came shortly AFTER they sold off their mobile division for a bag of peanuts ($67M). Horrible decisions.In any case, back to the cuts, it is becoming obvious it is impacting AMD"s product stack as there are rumors this next-gen of Radeon products will be nothing more than a single new ASIC headlining a bunch of rebrands for the rest fo the stack. Obviously, cutting engineers means fewer teams working on multiple ASICs for a full product stack, and ultimately this is how AMD pays for their "cost-cutting" measures.
silverblue - Friday, April 17, 2015 - link
It's almost as if somebody is deliberately running AMD into the ground, akin to Microsoft placing Stephen Elop at Nokia in order to make it far cheaper to acquire.Damn, I'm on a real conspiracy theory bender today.
chizow - Friday, April 17, 2015 - link
Hah, doubt its deliberate, they have just been trying to do too many things out of their comfort zone without focusing on their core competencies first. Also far too much effort and resources spent on a dead-end solution (APU) that no one is willing to spend top dollar on.AMD has learned the hard way that people just aren't willing to spend much on a mediocre CPU coupled with a slightly-better-than-Intel IGP graphics solution.
silverblue - Saturday, April 18, 2015 - link
Had AMD kept a wider core architecture when plonking a GPU on the side, it's more than likely that it would've been faster and used less power. I've said before and I'll say again - only one core may be working but the whole module will be active. Trinity required a clock frequency hike over Llano to get anywhere near parity and was more a proof of concept in the end - that Bulldozer could go into an APU.Bulldozer makes far more sense when you're ragging the crap out of it with multiple processes running at the same time. SMT makes more of a difference in synthetics so AMD will want to show off SiSoftware/3DMark/CineBench scores to get people interested in Zen even if SMT starts to falter the busier workloads get.
smilingcrow - Saturday, April 18, 2015 - link
"SMT makes more of a difference in synthetics"Bollocks. SMT works well for workstation loads and media creation. Just look at real world bechmarks for i7 for i5 for proof. Intel don't put SMT in Xeons for no reason as the people buying those aren't the idiots that give a shit about synthetics.
FlushedBubblyJock - Saturday, April 25, 2015 - link
AMD screwed the pooch when it's IPC and other processes per single core were slower than Intels.All the hoopla about multiple cores then fell entirely flat. The theory failed.
Intel didn't fail to notice, the $49.99 G3258 that clocks at 3,200 and OC's like mad is a mere dual core pentium haswell, but it equals and often beats Intel's $1,000.00 chips in half the games when OC'ed.
So when AMD releases it's next processor, they have better been focusing on the fastest single core performance they can muster, or they will lose miserably again.
sonicmerlin - Thursday, April 16, 2015 - link
I'd love to see Samsung buy AMD. AMD would gain a huge source of funding for x86 and have its own foundry again. Instant threat to Intel's dominance.iwod - Thursday, April 16, 2015 - link
Do the license agreement allows AMD to manufacture x86 CPU in TSMC and Samsung or only GF?LiviuTM - Friday, April 17, 2015 - link
ISA license (x86 license, in this case) has nothing to with manufacturing. It's the same as for ARM or MIPS licensees - they buy the right to use the cores (or ISA, as the big names do) and they are free to make the end product at any foundry they choose.JumpingJack - Saturday, April 18, 2015 - link
Incorrect.