Advanced Micro Devices Profit, Revenue Fall
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07/16/2015 | 03:05pm US/Eastern
Amid slowing sales for personal computers, Advanced Micro Devices Inc. provided further signs that the slump was causing widespread pain.
The chip maker on Thursday reported that its second-quarter loss totaled $181 million on a 35% plunge in revenues, driven largely by a sharp fall in AMD's sales of microprocessors for notebook computers.
On a brighter note, AMD projected revenue in the current period would increase between 3% and 9% from the second period.
The company had warned July 6 that it wouldn't hit its prior financial projections. Its shares have fallen lately, including a drop of nearly 5% Thursday, to approach a three-year low. AMD shares rose 2% in after-hours trading.
Lisa Su, AMD's chief executive, told analysts that consumer PC sales weakened in advance of systems running Microsoft Corp.'s new Windows 10 operating software, which she expected would spur orders.
"We believe the second quarter will be our revenue trough for the year," she said, with improved sales expected in the second half of 2015.
But Ms. Su added that the PC market remains volatile. "We must further align our cost structure with our revenue profile," she said.
Devinder Kumar, AMD's chief financial officer, said the company was assessing restructuring actions to cut its expenses. He said AMD's prior goal of reaching profitability later this year "has been pushed out."
Based in Sunnyvale, Calif., AMD is the longtime minority supplier of microprocessors, behind Intel Corp. The two companies use the same fundamental design, known as x86, that powers nearly all PCs.
Both companies have suffered. On Wednesday, Intel reported a 3.2% drop in second-quarter profit with revenue falling 4.6% from the year-ago period.
AMD has been trying to reduce its reliance on PC sales. It sells graphics chips used to render images in gaming PCs and the latest videogame consoles from Microsoft Corp. and Sony Corp. Its key rival in graphics is Nvidia Corp.
It has also been developing customized chips to order for other suppliers.
But PC chips remain its biggest business. AMD disclosed Thursday that revenue in its computing-and-graphics segment declined 54% from the year-earlier period. The business generated a $147 million operating loss.
Amid AMD's recent slide and a $2.3 billion debt load, some analysts are worried about the company's financial resources. The company projected Thursday that its cash would shrink to about $700 million in the third period, down nearly $130 million from the second quarter.
"They are starting to burn a ton of cash," said Stacy Rasgon, an analyst at Sanford C. Bernstein. "At that kind of run rate there isn't a lot of time left unless they turn it around."
Ms. Su, who assumed her position last fall, told analysts in May she expected the company to return to profitability in the second half of the year. Ms. Su set a long-term annual earnings target of 50 cents a share. In 2014, AMD reported a loss of $403 million, or 53 cents a share, and revenue of $5.5 billion.
In the second quarter, AMD's net loss came to 23 cents a share. The company reported a loss in the year-earlier period of $36 million, or five cents a share. Revenue fell to $942 million from $1.44 billion.
AMD issued a warning earlier in the month including the disclosure that it would log a $33 million charge tied shifting production processes for some forthcoming chips. Excluding that charge and stock-based compensation, AMD said its loss was 17 cents a share, compared with a year-earlier profit of five cents.
Analysts surveyed by Thomson Reuters had projected a loss on that basis of 17 cents a share.
Write to Maria Armental at [email protected] and Don Clark at [email protected]
Envoyer par mail
07/16/2015 | 03:05pm US/Eastern
Amid slowing sales for personal computers, Advanced Micro Devices Inc. provided further signs that the slump was causing widespread pain.
The chip maker on Thursday reported that its second-quarter loss totaled $181 million on a 35% plunge in revenues, driven largely by a sharp fall in AMD's sales of microprocessors for notebook computers.
On a brighter note, AMD projected revenue in the current period would increase between 3% and 9% from the second period.
The company had warned July 6 that it wouldn't hit its prior financial projections. Its shares have fallen lately, including a drop of nearly 5% Thursday, to approach a three-year low. AMD shares rose 2% in after-hours trading.
Lisa Su, AMD's chief executive, told analysts that consumer PC sales weakened in advance of systems running Microsoft Corp.'s new Windows 10 operating software, which she expected would spur orders.
"We believe the second quarter will be our revenue trough for the year," she said, with improved sales expected in the second half of 2015.
But Ms. Su added that the PC market remains volatile. "We must further align our cost structure with our revenue profile," she said.
Devinder Kumar, AMD's chief financial officer, said the company was assessing restructuring actions to cut its expenses. He said AMD's prior goal of reaching profitability later this year "has been pushed out."
Based in Sunnyvale, Calif., AMD is the longtime minority supplier of microprocessors, behind Intel Corp. The two companies use the same fundamental design, known as x86, that powers nearly all PCs.
Both companies have suffered. On Wednesday, Intel reported a 3.2% drop in second-quarter profit with revenue falling 4.6% from the year-ago period.
AMD has been trying to reduce its reliance on PC sales. It sells graphics chips used to render images in gaming PCs and the latest videogame consoles from Microsoft Corp. and Sony Corp. Its key rival in graphics is Nvidia Corp.
It has also been developing customized chips to order for other suppliers.
But PC chips remain its biggest business. AMD disclosed Thursday that revenue in its computing-and-graphics segment declined 54% from the year-earlier period. The business generated a $147 million operating loss.
Amid AMD's recent slide and a $2.3 billion debt load, some analysts are worried about the company's financial resources. The company projected Thursday that its cash would shrink to about $700 million in the third period, down nearly $130 million from the second quarter.
"They are starting to burn a ton of cash," said Stacy Rasgon, an analyst at Sanford C. Bernstein. "At that kind of run rate there isn't a lot of time left unless they turn it around."
Ms. Su, who assumed her position last fall, told analysts in May she expected the company to return to profitability in the second half of the year. Ms. Su set a long-term annual earnings target of 50 cents a share. In 2014, AMD reported a loss of $403 million, or 53 cents a share, and revenue of $5.5 billion.
In the second quarter, AMD's net loss came to 23 cents a share. The company reported a loss in the year-earlier period of $36 million, or five cents a share. Revenue fell to $942 million from $1.44 billion.
AMD issued a warning earlier in the month including the disclosure that it would log a $33 million charge tied shifting production processes for some forthcoming chips. Excluding that charge and stock-based compensation, AMD said its loss was 17 cents a share, compared with a year-earlier profit of five cents.
Analysts surveyed by Thomson Reuters had projected a loss on that basis of 17 cents a share.
Write to Maria Armental at [email protected] and Don Clark at [email protected]
