AMD Reports 2014 First Quarter Results

[Cristian_25H]

AMD today announced revenue for the first quarter of 2014 of $1.40 billion, operating income of $49 million and net loss of $20 million, or $0.03 per share. The company reported non-GAAP operating income of $66 million and non-GAAP net income of $12 million, or $0.02 per share.

"AMD continued our momentum by building on the solid foundation we set in the second half of 2013, further transforming the company," said Rory Read, AMD president and CEO. "Backed by our powerful x86 processor cores and hands-down best graphics experiences, we achieved 28 percent revenue growth from the year-ago quarter. We are well positioned to continue to grow profitably as we diversify our business and enable our customers to drive change and win."





Quarterly Financial Summary

• Gross margin was 35 percent in Q1 2014.

Gross margin was flat sequentially.

• Cash, cash equivalents and marketable securities, including long-term marketable securities, were $982 million at the end of the quarter, close to the optimal balance of $1 billion and well above the target minimum of $600 million.

In Q1 2014, AMD made the final $200 million cash payment to GLOBALFOUNDRIES related to the reduction of the "take or pay" wafer obligation commitments for 2012.

• Total debt, long-term and short-term, at the end of the quarter was $2.14 billion, up from $2.06 billion in Q4 2013.

During Q1 2014, AMD focused on re-profiling its near-term debt maturities. The company issued $600 million in aggregate principal value of 6.75% Senior Notes due 2019, utilizing proceeds to repurchase approximately $423 million aggregate principal amount of its 6.00% Convertible Senior Notes due 2015 and approximately $48 million aggregate principal amount of its 8.125% Senior Notes due 2017 during the quarter.
Additionally, AMD repurchased approximately $64 million aggregate principal amount of its 6.00% Convertible Senior Notes due 2015 in the open market utilizing cash balances in Q1 2014.

• Computing Solutions segment revenue decreased 8 percent sequentially and 12 percent year-over-year. The sequential and year-over-year declines were due to decreased client unit shipments.

Operating loss was $3 million, an improvement from an operating loss of $7 million in Q4 2013 and $39 million in Q1 2013 driven by lower operating expenses.
Microprocessor average selling price (ASP) was flat sequentially and decreased slightly year-over-year.

• Graphics and Visual Solutions segment revenue decreased 15 percent sequentially and increased 118 percent year-over-year driven largely by semi-custom SoCs. GPU revenue increased sequentially and year-over-year due to strong demand for the AMD Radeon R7 and R9 family of products.

Operating income was $91 million compared with $121 million in Q4 2013 and $16 million in Q1 2013. The sequential decline was primarily due to decreased revenue from semi-custom SoCs while the year-over-year increase was driven by higher sales of semi-custom SoCs.
GPU ASP increased sequentially and year-over-year driven by the Radeon R7 and R9 family of products.

Recent Highlights

• Industry veterans Nora Denzel and Mike Inglis were appointed to AMD's board of directors, each bringing a diverse set of management, technology, sales and marketing expertise.
• AMD announced an amendment to the Wafer Supply Agreement with GLOBALFOUNDRIES that established fixed pricing and other terms which apply to products AMD will purchase in 2014. AMD expects to purchase approximately $1.2 billion of wafers from GLOBALFOUNDRIES in 2014, in line with the company's current market expectations.
• AMD expanded its latest industry-leading family of graphics chips with the introduction of the AMD Radeon R7 250X, R7 265 and R9 280 for mainstream users and the AMD Radeon R9 295X2, the world's fastest and most powerful graphics card powered by two AMD Radeon R9 Series GPUs on a single card.
• AMD launched the AMD FirePro W9100 professional graphics card for next-generation workstations, delivering an industry-first 16GB DDR5 memory, more than 2 TFLOPS of double precision compute performance and 4K support on up to six displays.
• AMD's momentum as the hardware development platform of choice for the gaming community continued in the quarter.

The Mantle graphics API, designed to alleviate software inefficiencies that have historically stifled PC gaming performance and take advantage of AMD's Graphics Core Next (GCN) architecture to deliver console-like experiences, continues to see strong developer adoption. Since being announced late last year, support has been announced from seven developers spanning four game engines and more than 20 titles. New additions include developer Crytek and the eagerly anticipated title "Sid Meier's Civilization: Beyond Earth."
Rebellion Developments, Square Enix and Xaviant are the latest developers to join the AMD Gaming Evolved program and will optimize their future PC games to make them look and run better on AMD hardware.

• AMD announced support for Microsoft DirectX 12, a new version of the graphics API, on all AMD Radeon GPUs that feature the GCN architecture.
• AMD announced further details of the AMD Opteron A1100 Series, the first 64-bit ARM-based server CPU at 28 nanometer. The company also displayed a comprehensive development platform which includes an evaluation board and a comprehensive software suite to enable a robust 64-bit software ecosystem for ARM-based server designs in advance of general availability planned for later this year. AMD also announced it would contribute a new micro-server design using the AMD Opteron A-Series to the Open Compute Project.
• AMD announced global availability of its new AM1 platform, bringing an unprecedented level of graphics and compute capabilities to the mainstream market at very attractive price-points. The socketed quad-core and dual-core variants of the AMD Athlon and AMD Sempron APUs are based on award-winning GCN architecture and "Jaguar" CPU core.
• AMD made a strong showing at Mobile World Congress with the debut of the company's 2014 Mobile APU line-up. AMD also earned a "Best of Mobile World Congress 2014" award for the "Nano PC" design concept, a full-feature Windows 8 PC reference design the size of a smart phone.
• AMD and Adobe announced numerous performance optimizations for video-based applications in Adobe Creative Cloud on AMD's discrete GPUs and APUs. The work by both companies builds on the already impressive optimizations for Adobe Premiere Pro CC, Adobe SpeedGrade CC, and Adobe Media Encoder CC, made in recent months.
• AMD continued to expand its immersive graphics, bringing 3D and 4K graphics to embedded gaming machines, digital signage, medical imaging, commercial aerospace, conventional military and other embedded applications with the introduction of the AMD Embedded Radeon E8860 GPU.

Current Outlook
For the second quarter of 2014, AMD expects revenue to increase 3 percent, plus or minus 3 percent, sequentially.

View at TechPowerUp Main Site

 

[refillable]

Umm... Not bad, they should quickly develop a mobile solution.

 

[Jorge]

They have a long ways to go... They have some good products but they have shot themselves in the foot with no AM3+ successor for Vishera. That is a huge mistake. Kaveri and Kabini are positives but AMD needs a whole lot more performance in the X86, SoC and ARM segments, IMO. They can't survive on just graphics performance, which is what they are using while trying to get their discrete CPU line sorted out.

 

[zzzaac]

Umm... Not bad, they should quickly develop a mobile solution.

I agree somewhat, mobile is definitely the next step, and some might say a necessity.

But it is tough there, Qualcomm is dominant, while Intel is starting to focus on mobile. Look at NVIDIA, they aren't doing so well with their Tegra anymore (could be because it isn't a really good SoC), so if AMD is going mobile, it is going to be tough

 

[renz496]

I agree somewhat, mobile is definitely the next step, and some might say a necessity.

But it is tough there, Qualcomm is dominant, while Intel is starting to focus on mobile. Look at NVIDIA, they aren't doing so well with their Tegra anymore (could be because it isn't a really good SoC), so if AMD is going mobile, it is going to be tough

performance wise Tegra is quite good. for example Tegra 4 is quite competitive with Qualcomm Snapdragon 800 but in mobile performance alone will not enough especially in phones.

 

[zzzaac]

performance wise Tegra is quite good. for example Tegra 4 is quite competitive with Qualcomm Snapdragon 800 but in mobile performance alone will not enough especially in phones.

Yes, I found that while performance is good, it isn't good with battery life. It also lacks support by OEM's (Samsung, HTC etc), as a lot of them are using Qualcomm

 

[alwayssts]

GPU ASP increased sequentially and year-over-year driven by cryptominers, 28nm yields that are mature causing CTM to drop substrantially, and re-branded/re-situated skus with looser binning parameters and simultaniously higher msrps Radeon R7 and R9 family products.

Got a hold of the rough draft.

 

[john_]

I don't think Nvidia is aiming at smartphones anymore. With their gpu advantage I see them more targeting 2 in 1s, netbooks, laptops and later, who knows, desktops.
As for AMD, well they are not dead yet. And they better continue concentrating in the gpu market. Nvidia is a tough competitor but a much more easy target than going against Intel.

 

[alwayssts]

I don't think Nvidia is aiming at smartphones anymore. With their gpu advantage I see them more targeting 2 in 1s, netbooks, laptops and later, who knows, desktops.
As for AMD, well they are not dead yet. And they better continue concentrating in the gpu market. Nvidia is a tough competitor but a much more easy target than going against Intel.

I think they will do a trickle-down, similar to apple and using older processors (sometimes shrunk) in the mini and 5c. Perhaps by the time we see a 3 Shader Module Maxwell in a tablet (14-16nm?) we will see Kepler in a smartphone, or something to that effect. It's clear they are diverging their single-use chip into specific markets, which one can only say is about damn time. Tegra as it sat was a phone soc that used too much power, or a tablet soc that completely sucked. It's just like putting Bobcat/Kabini is a tablet, which while one can understand having only finite engineers and budget is hardly a great solution. Chips need to be built toward an application.

As for AMD, and speaking of Bobcat/Kabini, I think they are doing fine against Intel. Clearly that is where they should be aiming (until desktop apus are realistic for 1080p gaming and/or leveraging the gpu compute for typical cpu tasks becomes more common), and they are. I imagine they will continue to do so. At some point we all have to come to terms, as they did, with the fact we don't need them to win the high-end x86 processing segment. We simply need them to leverage the best mix of cpu+gpu within a given form-factor/resolution, just like nvidia is planning. I hope that includes very low watt specific apus (for phones and tablet) rather than scaling existing designs, especially considering how many people left or lost their jobs over it (and the fact they have alluded to ARM apus in the future), but we'll see.

 

[john_]

Nvidia doesn't have a future in smartphones. Qualcomm has become just too great and their solutions are more power efficient. Difficult to fight them in the hi end. Also we have passed the line of ridiculous. 8 cores in a phone? So not really a big enough market for hi end Tegras. Mid range and low end phones? Completely taken over from Mediatek and Qualcomm. Margins also going down in that market. Shareholders don't like margins going down.

Tablets? Maybe, but Intel is coming to town and the market is going to be divided between X86 and ARM. So, can you fight both Qualcomm and Intel? And after Intel, AMD will follow. Mediatek will also be there with their 8 core solutions. Too crowded in every section. Hi end, mid range, low end. If not today, pretty soon.

You also forget the Apple market. They don't need you. They create their own SoCs.

What is left? Shield, Tegra Tab, or in other words what you can produce on your own. Is this enough? Maybe to keep you in the market, but I doubt to cover the expenses except if you create something really revolutionary.

Nvidia will have to move in bigger devices where they have the advantage. Netbooks, laptops, desktops. A completely Nvidia platform with ARM SoC in the middle and a powerful GPU connected using maybe NVlink running Steam OS and Android at the same time(like what Intel was showing recently or what AMD is trying to accomplish with the help of Bluestacks).



As for AMD, as long as Intel is leaving them breathing room, it is going to be OK. And maybe if they manage to gain enough market share in the professional graphics to become more competitive again in all sectors.

 

[a_ump]

Damn shame, hope to see AMD make a net "profit" instead of loss within the next few years. My only guess is with the consoles they should definitely get profit...i would think anyways esp getting rid of high-end desktop CPU/APU development. Did they fire or layoff a whole bunch of employees? or did they just refocus them to low-mid APU development?

 

[HalfAHertz]

They have a long ways to go... They have some good products but they have shot themselves in the foot with no AM3+ successor for Vishera. That is a huge mistake. Kaveri and Kabini are positives but AMD needs a whole lot more performance in the X86, SoC and ARM segments, IMO. They can't survive on just graphics performance, which is what they are using while trying to get their discrete CPU line sorted out.

AMD gave up on CPUs already. They've shown that all they'll focus on from now on are APUs and HSA computing. They're betting the house on it and it will either pick up or it will sink and bring AMD down with it.

 

[Hilux SSRG]

Damn shame, hope to see AMD make a net "profit" instead of loss within the next few years. My only guess is with the consoles they should definitely get profit...i would think anyways esp getting rid of high-end desktop CPU/APU development. Did they fire or layoff a whole bunch of employees? or did they just refocus them to low-mid APU development?

Unfortunately, selling console semi custom chips will increase revenues and cashflow but provide very little profit. Amd needs the cashflow to develop their plans.

Headcount was reduced from last quarter but Amd still has 500+ employees yoy.

The Globalfoundries and Samsung 14nm FinFET tie up could keep AMD competitive with Intel's 14nm.

 

[HisDivineOrder]

Unfortunately, selling console semi custom chips will increase revenues and cashflow but provide very little profit. Amd needs the cashflow to develop their plans.

Headcount was reduced from last quarter but Amd still has 500+ employees yoy.

The Globalfoundries and Samsung 14nm FinFET tie up could keep AMD competitive with Intel's 14nm.

IF GloFo can capitalize on a new process without having all the problems they've had with each move to a new tech they've had thus far. The question is whether their problems are because of the tech they're developing (ie., solved by the Samsung deal?) or if they just can't get their manufacturing up to snuff (ie., not solved by the Samsung deal).

Anyways, I expect the Samsung deal is mostly a way for Samsung to have a go-to secondary manufacturer in case they need more capacity and the bonus is they get some money, too. Obviously, for GloFo it helps them not keep throwing money away on their own attempts and helps them bridge the gap between them and Intel whose head start on fabs was at one time seemingly insurmountable. It may yet be, depending on if how many delays they suffer.

I expect most fab companies (or companies who have fabs) see Intel as their real competitor and all other companies as potential allies against Intel. That's a testament to how far ahead of the rest of the industry Intel is.

 

[a_ump]

not meaning to go off topic, but is intels fab work superior to TSMC's and Glo-Fo? or just GF?

 

[Slizzo]

not meaning to go off topic, but is intels fab work superior to TSMC's and Glo-Fo? or just GF?

They don't seem to be having yield issues like TSMC and GloFo has, but they don't really release details about it so it's hard to tell.

 

[Hilux SSRG]

not meaning to go off topic, but is intels fab work superior to TSMC's and Glo-Fo? or just GF?

Intel's 14nm will be superior to the 14nm FinFET coming from the 20nm process. In general Intel sets their release dates better and disclose less than TMSC or GLFO.