AMD Reports 2014 Fourth Quarter Results (And Annual) - Net Loss of $364 million

[BiG StroOnZ]

 AMD (NASDAQ: AMD) today announced revenue for the fourth quarter of 2014 of $1.24 billion, operating loss of $330 million and net loss of $364 million, or $0.47 per share. Non-GAAP(1) operating income was $36 million, non-GAAP(1) net income of $2 million and breakeven non-GAAP(1) earnings per share.

 

• 2014 Annual Results
  • Revenue of $5.51 billion, up 4 percent year-over-year.
  • Gross margin of 33 percent, down 4 percentage points year-over-year and non-GAAP(1)gross margin of 34 percent, down 3 percentage points year-over-year.
  • Operating loss of $155 million and non-GAAP(1) operating income of $235 million, compared to GAAP and non-GAAP(1) operating income of $103 million in 2013.

     

  • Net loss of $403 million, loss per share of $0.53, and non-GAAP(1) net income of $51 million, non-GAAP(1) earnings per share of $0.06, compared to a GAAP and non-GAAP(1) net loss of $83 million, loss per share of $0.11 in 2013.

     

• Q4 2014 Results
  • Revenue of $1.24 billion, down 13 percent sequentially and 22 percent year-over-year.
  • Gross margin of 29 percent and non-GAAP(1) gross margin of 34 percent. Gross margin was down 6 percentage points sequentially, primarily due to lower of cost or market inventory adjustment of $58 million related to our second-generation APU products. Non-GAAP(1) gross margin was down 1 percentage point sequentially. Q3 2014 gross margin of 35 percent included a $27 million, or 2 percent, benefit from revenue related to technology licensing.
  • Operating loss of $330 million and non-GAAP(1) operating income of $36 million, compared to operating income of $63 million and non-GAAP(1) operating income of $66 million in Q3 2014.
  • Net loss of $364 million, loss per share of $0.47, and non-GAAP(1) net income of $2 million, breakeven non-GAAP(1) earnings per share, compared to net income of $17 million, earnings per share of $0.02 and non-GAAP(1) net income of $20 million, non-GAAP(1) earnings per share of $0.03 in Q3 2014.
  • Cash, cash equivalents and marketable securities were $1.04 billion at the end of the quarter, up $102 million from the end of the prior quarter.
  • Total debt at the end of the quarter was $2.21 billion, flat from the prior quarter. 
• Computing and Graphics segment revenue decreased 15 percent sequentially and 16 percent from 2013. The sequential decrease was primarily due to lower desktop processor and GPU sales, and the annual decrease was driven by lower desktop processor and chipset sales.
  • Operating loss was $56 million, compared with an operating loss of $17 million in Q3 2014 and operating loss of $15 million in Q4 2013. The sequential and year-over-year decreases were primarily driven by lower channel sales partially offset by lower operating expenses.
  • Client average selling price (ASP) increased sequentially and year-over-year primarily driven by a richer mix of notebook processor sales.
  • GPU ASP increased sequentially primarily due to higher desktop and notebook GPU ASPs and decreased year-over-year primarily due to a lower channel ASP.
• Enterprise, Embedded and Semi-Custom segment revenue decreased 11 percent sequentially primarily driven by lower sales of semi-custom SoCs. Annual revenue increased 51 percent from 2013 primarily driven by increased sales of semi-custom SoCs.
  • Operating income was $109 million compared with $108 million in Q3 2014 and $129 million in Q4 2013. The year-over-year decrease was primarily due to lower sales of semi-custom SoCs.
• All Other category operating loss was $383 million compared with $28 million in Q3 2014 and operating income of $21 million in Q4 2013. The sequential and year-over-year decreases are primarily due to a $233 million goodwill impairment charge, $71 million restructuring and other special charges, net and a $58 million lower of cost or market inventory adjustment. 

 

AMD had three large reasons for the loss this quarter which hit their GAAP numbers pretty hard. First, they had yet another write down of their SeaMicro and ATI acquisitions, which they attribute to a decline in their stock prices. This cost them $233 million this quarter. Second, they have had to perform a write down for their second generation APU products, which they have listed higher on their balance sheets than they can sell them for now, however they do expect to sell through their inventory. This contributed to a $58 million non-cash charge. Finally, restructuring charges based on layoffs and the departure of their CEO, as well as real estate restructuring charges cost an additional $71 million. As these are all one time charges, AMD has also released Non-GAAP results which exclude these write downs.

 

Source: http://finance.yahoo.com/news/amd-reports-2014-fourth-quarter-211500020.html

Source 2: http://www.anandtech.com/show/8913/amd-reports-q4-fy-2014-and-full-year-results

 

 

I really don't know what AMD's plan is, but this is not looking too good for them. I foresee roadmaps getting pushed back since they aren't spending nearly as much in R&D year after year. Which could possibly result in an even worse outcome for them. This is definitely not what we need from them, that's for sure.

[Pyromaniac225]

Please don't die AMD D:

[JeffreyEagan]

Wowzers. This R9 300 series had better save their asses.

[mr moose]

So glad I didn't buy stocks when they were cheap but things looked on the rise.   This news make me sad because I hate seeing companies struggle like this, it usually results in everyday workers having to find new jobs.

[Opcode]

We all figured this much as you can only re-brand (GPU) and release subpar (CPU) products for so long. This is why Lisa Su is targeting motivation in the CPU and GPU markets. Pirate Islands and Zen will hopefully be the turn around point for AMD.

[Interfectorem]

Aww, I hope they can still stay standing.

[Extingquish]

I honestly hope they don't die At least for competition's sake, anyway

[Dietrichw]

Well duh, this was expected they haven't released any major new products in 14+ months. In the next quarter when the 300 series hits the market they will be in the positive.

[Faceman]

Someone else posted elsewhere about Samsung buying AMD, I personally think that is a match made in heaven and hope it happens.

[Opcode]

Someone else posted elsewhere about Samsung buying AMD, I personally think that is a match made in heaven and hope it happens.

It would be a good buy for both companies. Samsung could leverage AMD's GPU IP meanwhile AMD can certainly leverage Samsung's fabrication processes. Meanwhile AMD would have a large pool of money for R&D. Tho I get the feeling such a thing isn't going to happen that Lisa will want to dig AMD out of the hole that they have been in for so long. Which is certainly feasible as long as she plays her cards right. We will get a taste of what that may be like with the launch of Pirate Islands.

[DaRk0]

Pretty bad results for a company that's taking over some of Nvidia's dGPU market share and destroying Intel on mobile front - according to some 'forum experts'.

[Memphaestus]

I'm sure that most people saw this coming.  Like Dietrichw mentioned, AMD hasn't released any major new products in over a year.  If everything is just a rehash of old products, myself and obviously the populous at large won't be buying.  At the same time, Nvidia and Intel have been releasing new products all year long.  The 300 series of cards need to be a huge jump in performance, 30-50% improvement over the 200 series, for them to really make a dent in Nvidia's share of the market.  In addition to that, AMD needs to release new powerful 6-8 core CPU's with performance that at least matches Intel's newest line of chips.  That is a lot to ask from AMD, but I have faith that they will be able to pull themselves out of this hole.

[mr moose]

Too many Mondays experts on these forums. 

[SurvivorNVL]

AMD won't die, and they've a lot incoming with the 3xx series and Zen.  I do however feel Samsung acquiring them would be -amazing-, but would be weird too, given their deal with OCZ for SSD's.  But.. everything's in the air, and we gotta wait!

[bcredeur97]

guys, honestly what would we do without AMD??

 

no competition for intel and Nvidia means they can raise prices...

[BookerDeWitt]

AMD registering 400 million GAAP losses, but actually made $50 million profit. This is including their $300+ million fine to Glofo for cancelling wafer orders.

[TechFan@ic]

I'm more interested in their Q1 2015 guidance because it can tell us if they're going to release any new interesting products. The CEO also said AMD is pouring more into server CPU R&D, which means enthusiast desktop parts.

[mr moose]

AMD registering 400 million GAAP losses, but actually made $50 million profit. This is including their $300+ million fine to Glofo for cancelling wafer orders.

 

Ambiguous statement, they only made $51M in profit if you follow the non-Gaap figures they report.  They actually didn't make any profit.

[TroubleKlef]

Hopefully AMD can get out of their rut and turn it around. I'm a big fan of competition.

 

Unfortunately, AMD hasn't released anything competitive for awhile now and they are paying the price for it. 

[virtualTune]

this makes me so happy.

[Ertman]

Interesting all of you fretting over this, come on the loss includes a goodwill write down.

Good to see cash and cash equivalents increase and a hold on total debt.

I can see why the CMO is gone though.

[Briggsy]

a business reporting a quarterly loss generally isn't a bad thing. In the past quarter AMD have been hiring a lot of new people, and shifting resources around.

 

In fact, this could be a sign that AMD are preparing new products for launch later this year. It takes a massive financial investment upfront to prepare a new product for launch, before they can start making any money back. Graphic cards and processors don't magically appear, they have to be made, and that costs a lot of money up front (hundreds of millions potentially) to produce enough for a world wide launch.

[The Crazed Child]

this makes me so happy.

You're kidding right?

[virtualTune]

You're kidding right?

no. I bet on them losing money

[Bouvie_11]

Hopefully AMD can get back in profit from the Upcoming R9 300 series GPUs.... and as for CPUs hopefully the new zen x86 architecture sometime in 2016 will put them back in the game. If worst comes to worst i hope Samsung or another company keeps them afloat by buying them out. The last thing we want is just nvidia and Intel fully dominating the market. Competition is good for this industry!!!!