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AMD Reports 2014 First Quarter Results

SUNNYVALE, CA -- (Marketwired) -- Apr 17, 2014 -- AMD (NYSE: AMD)

Q1 2014 Results

AMD (NYSE: 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."

                                                                            
                           GAAP Financial Results                           
                                                                            
----------------------------------------------------------------------------
                                    Q1-14          Q4-13          Q1-13     
----------------------------------------------------------------------------
Revenue                             $1.40B         $1.59B         $1.09B    
----------------------------------------------------------------------------
Operating income (loss)              $49M          $135M          $(98)M    
----------------------------------------------------------------------------
Net income (loss) / Earnings                                                
(loss) per share                $(20)M/$(0.03)   $89M/$0.12  $(146)M/$(0.19)
----------------------------------------------------------------------------
                                                                            
                       Non-GAAP Financial Results (1)                       
                                                                            
----------------------------------------------------------------------------
                                    Q1-14          Q4-13          Q1-13     
----------------------------------------------------------------------------
Revenue                             $1.40B         $1.59B         $1.09B    
----------------------------------------------------------------------------
Operating income (loss)              $66M           $91M          $(46)M    
----------------------------------------------------------------------------
Net income (loss) / Earnings                                                
(loss) per share                  $12M/$0.02     $45M/$0.06   $(94)M/$(0.13)
----------------------------------------------------------------------------
                                                                            

Quarterly Financial Summary

Recent Highlights

Current Outlook

AMD's outlook statements are based on current expectations. The following statements are forward-looking, and actual results could differ materially depending on market conditions and the factors set forth under "Cautionary Statement" below.

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

For additional details regarding AMD's results and outlook please see the CFO commentary posted at quarterlyearnings.amd.com.

AMD Teleconference

AMD will hold a conference call for the financial community at 2:30 p.m. PT (5:30 p.m. ET) today to discuss its first quarter financial results. AMD will provide a real-time audio broadcast of the teleconference on the Investor Relations page of its web site at www.amd.com. The webcast will be available for 12 months after the conference call.

Reconciliation of GAAP to Non-GAAP Operating Income (Loss)(1)

                                                                            
Reconciliation of GAAP to Non-GAAP Operating                                
 Income (Loss)                                                              
                                            --------------------------------
(Millions)                                       Q1-14      Q4-13      Q1-13
----------------------------------------------------------------------------
GAAP operating income (loss)                $       49 $      135 $     (98)
----------------------------------------------------------------------------
  Workforce rebalancing severance charges           14          -          -
----------------------------------------------------------------------------
  Amortization of acquired intangible assets         3          4          5
----------------------------------------------------------------------------
  Restructuring and other special charges,                                  
   net                                               -          -         47
----------------------------------------------------------------------------
  Legal settlements, net                             -       (48)          -
----------------------------------------------------------------------------
Non-GAAP operating income (loss)            $       66 $       91 $     (46)
----------------------------------------------------------------------------
                                                                            

Reconciliation of GAAP to Non-GAAP Net Income (Loss)

                                                                            
Reconciliation of GAAP to                                                   
 Non-GAAP Net Income (Loss)                                                 
                             -----------------------------------------------
(Millions except per share                                                  
 amounts)                         Q1-14           Q4-13           Q1-13     
----------------------------------------------------------------------------
GAAP net income (loss) /                                                    
 Earnings (loss) per share   $  (20) $(0.03) $    89 $  0.12 $ (146) $(0.19)
----------------------------------------------------------------------------
  Workforce rebalancing                                                     
   severance charges              14    0.02       -       -       -       -
----------------------------------------------------------------------------
  Loss on debt redemption         15    0.02       -       -       -       -
----------------------------------------------------------------------------
  Amortization of acquired                                                  
   intangible assets               3    0.00       4       -       5    0.01
----------------------------------------------------------------------------
  Restructuring and other                                                   
   special charges, net            -       -       -       -      47    0.06
----------------------------------------------------------------------------
  Legal settlements, net           -       -    (48)  (0.06)       -       -
----------------------------------------------------------------------------
Non-GAAP net income (loss) /                                                
 Earnings (loss) per share   $    12 $  0.02 $    45 $  0.06 $  (94) $(0.13)
----------------------------------------------------------------------------
                                                                            

About AMD
AMD (NYSE: AMD) designs and integrates technology that powers millions of intelligent devices, including personal computers, tablets, game consoles and cloud servers that define the new era of surround computing. AMD solutions enable people everywhere to realize the full potential of their favorite devices and applications to push the boundaries of what is possible. For more information, visit www.amd.com.

Cautionary Statement
This release contains forward-looking statements concerning AMD, its ability to grow profitably; its ability to diversify its business; its targeted and optimal cash, cash equivalents and marketable securities, including long-term marketable securities, balances; its expected 2014 payments to GLOBALFOUNDRIES (GF); and its expected second quarter of 2014 revenue; which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are commonly identified by words such as "believes, "expects," "may," "will," "should," "seeks," "intends," "pro forma," "estimates," "anticipates," "plans," "projects," "would" and other terms with similar meaning. Investors are cautioned that the forward-looking statements in this release are based on current beliefs, assumptions and expectations, speak only as of the date of this release and involve risks and uncertainties that could cause actual results to differ materially from current expectations. Risks include the possibility that Intel Corporation's pricing, marketing and rebating programs, product bundling, standard setting, new product introductions or other activities may negatively impact AMD's plans, that AMD will require additional funding and may be unable to raise sufficient capital on favorable terms, or at all; that customers stop buying AMD's products or materially reduce their operations or demand for AMD's products; that AMD may be unable to develop, launch and ramp new products and technologies in the volumes that are required by the market at mature yields on a timely basis; that AMD's third-party foundry suppliers will be unable to transition AMD's products to advanced manufacturing process technologies in a timely and effective way or to manufacture AMD's products on a timely basis in sufficient quantities and using competitive process technologies; that AMD will be unable to obtain sufficient manufacturing capacity or components to meet demand for its products or will not fully utilize its projected manufacturing capacity needs at GF microprocessor manufacturing facilities; that AMD's requirements for wafers will be less than the fixed number of wafers that it agreed to purchase from GF or GF encounters problems that significantly reduce the number of functional die it receives from each wafer; that AMD is unable to successfully implement its long-term business strategy; that AMD inaccurately estimates the quantity or type of products that its customers will want in the future or will ultimately end up purchasing, resulting in excess or obsolete inventory; that AMD is unable to manage the risks related to the use of its third-party distributors and add-in-board (AIB) partners or offer the appropriate incentives to focus them on the sale of AMD's products; that AMD may be unable to maintain the level of investment in research and development that is required to remain competitive; that there may be unexpected variations in market growth and demand for AMD's products and technologies in light of the product mix that it may have available at any particular time; that global business and economic conditions will not improve or worsen; that PC market conditions, will not improve or will worsen; that demand for computers will be lower than currently expected; and the effect of political or economic instability, domestically or internationally, on AMD's sales or supply chain. Investors are urged to review in detail the risks and uncertainties in AMD's Securities and Exchange Commission filings, including but not limited to the Annual Report on Form 10-K for the year ended December 28, 2013.

AMD, the AMD Arrow logo, AMD Opteron, AMD Radeon and combinations thereof, are trademarks of Advanced Micro Devices, Inc. Other names are for informational purposes only and used to identify companies and products and may be trademarks of their respective owner.

(1) In this release, in addition to GAAP financial results, AMD has provided
    non-GAAP financial measures, including non-GAAP operating income (loss),
    non-GAAP net income (loss) and non-GAAP earnings (loss) per share. These
    non-GAAP financial measures reflect certain adjustments as presented in 
    the data tables in this press release. AMD also provided Adjusted EBITDA
    and non-GAAP free cash flow as supplemental measures of its performance.
    These items are defined in the footnotes to the selected data tables    
    provided at the end of this release. AMD is providing these financial   
    measures because it believes this non-GAAP presentation makes it easier 
    for investors to compare its operating results for current and          
    historical periods and also because AMD believes it assists investors in
    comparing AMD's performance across reporting periods on a consistent    
    basis by excluding items that it does not believe are indicative of its 
    core operating performance and for the other reasons described in the   
    footnotes to the selected data tables. Refer to the data tables at the  
    end of this release for additional AMD data.                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                             
(Millions except per share amounts and percentages)                         
                                                                            
                                                 Quarter Ended              
                                    --------------------------------------- 
                                     March 29,      Dec 28,       Mar. 30,  
                                        2014          2013          2013    
                                                                            
                                    -----------   -----------   ----------- 
                                                                            
Net revenue                         $     1,397   $     1,589   $     1,088 
                                                                            
Cost of sales                               910         1,036           643 
                                                                            
                                    -----------   -----------   ----------- 
                                                                            
Gross margin                                487           553           445 
                                                                            
Gross margin %                               35%           35%           41%
                                                                            
Research and development                    279           293           312 
                                                                            
Marketing, general and                                                      
 administrative                             156           169           179 
                                                                            
Amortization of acquired                                                    
 intangible assets                            3             4             5 
                                                                            
Restructuring and other special                                             
 charges, net                                 -             -            47 
                                                                            
Legal settlements, net                        -           (48)            - 
                                                                            
                                    -----------   -----------   ----------- 
                                                                            
Operating income (loss)                      49           135           (98)
                                                                            
Interest income                               1             1             1 
Interest expense                            (47)          (44)          (44)
Other expense, net                          (21)           (2)           (3)
                                                                            
                                    -----------   -----------   ----------- 
                                                                            
Income (loss) before income taxes           (18)           90          (144)
                                                                            
Provision for income taxes                    2             1             2 
                                                                            
                                    -----------   -----------   ----------- 
                                                                            
Net income (loss)                   $       (20)  $        89   $      (146)
                                                                            
                                                                            
Net income (loss) per share                                                 
                                                                            
  Basic                             $     (0.03)  $      0.12   $     (0.19)
                                                                            
  Diluted                           $     (0.03)  $      0.12   $     (0.19)
                                                                            
                                    -----------   -----------   ----------- 
                                                                            
Shares used in per share                                                    
 calculation                                                                
                                                                            
  Basic                                     761           759           749 
                                                                            
  Diluted                                   761           766           749 
                                                                            
                                    -----------   -----------   ----------- 
                                                                            
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)            
(Millions)                                                                  
                                                                            
                                                 Quarter Ended              
                                    --------------------------------------- 
                                     March 29,      Dec 28,       Mar. 30,  
                                        2014          2013          2013    
                                                                            
                                    -----------   -----------   ----------- 
                                                                            
Total comprehensive income (loss)   $       (21)  $        89   $      (147)
                                                                            
                                    -----------   -----------   ----------- 
                                                                            
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED BALANCE SHEETS                                       
(Millions)                                                                  
                                                                            
                                    -----------   -----------   ----------- 
                                     March 29,      Dec 28,       Mar. 30,  
                                        2014          2013          2013    
                                                                            
                                    -----------   -----------   ----------- 
                                                                            
Assets                                                                      
                                                                            
Current assets:                                                             
  Cash and cash equivalents         $       554   $       869   $       441 
  Marketable securities                     348           228           562 
  Accounts receivable, net                  840           832           645 
  Inventories, net                          869           884           613 
  Prepaid expenses and other                                                
   current assets                            79            71            77 
                                                                            
                                    -----------   -----------   ----------- 
                                                                            
      Total current assets                2,690         2,884         2,338 
                                                                            
Long-term marketable securities              80            90           180 
Property, plant and equipment, net          337           346           411 
Acquisition related intangible                                              
 assets, net                                 75            78            92 
Goodwill                                    553           553           553 
Other assets                                373           386           223 
                                    -----------   -----------   ----------- 
                                                                            
Total Assets                        $     4,108   $     4,337   $     3,797 
                                    ===========   ===========   =========== 
                                                                            
Liabilities and Stockholders'                                               
 Equity                                                                     
                                                                            
Current liabilities:                                                        
  Short-term debt                   $        60   $        60   $         5 
  Accounts payable                          483           519           301 
  Payable to GLOBALFOUNDRIES                213           364           379 
  Accrued and other current                                                 
   liabilities                              482           530           504 
  Deferred income on shipments to                                           
   distributors                             146           145           132 
                                                                            
                                    -----------   -----------   ----------- 
                                                                            
      Total current liabilities           1,384         1,618         1,321 
                                                                            
Long-term debt                            2,078         1,998         2,039 
Other long-term liabilities                 135           177            22 
                                                                            
Stockholders' equity:                                                       
  Capital stock:                                                            
    Common stock, par value                   8             7             7 
    Additional paid-in capital            6,883         6,894         6,827 
    Treasury stock, at cost                (114)         (112)         (109)
  Accumulated deficit                    (6,263)       (6,243)       (6,306)
  Accumulated other comprehensive                                           
   loss                                      (3)           (2)           (4)
                                                                            
                                    -----------   -----------   ----------- 
                                                                            
      Total stockholders' equity            511           544           415 
                                                                            
                                    -----------   -----------   ----------- 
                                                                            
Total Liabilities and                                                       
 Stockholders' Equity               $     4,108   $     4,337   $     3,797 
                                    ===========   ===========   =========== 
                                                                            
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS                              
(Millions)                                                                  
                                                              Quarter Ended 
                                                             -------------- 
                                                                March 29,   
                                                                  2014      
                                                                            
                                                             -------------- 
                                                                            
Cash flows from operating activities:                                       
  Net loss                                                   $          (20)
  Adjustments to reconcile net loss to net cash used in                     
   operating activities:                                                    
    Depreciation and amortization                                        53 
    Employee stock-based compensation expense                            23 
    Non-cash interest expense                                             6 
    Loss on debt redemption                                              15 
    Other                                                                (4)
  Changes in operating assets and liabilities:                              
    Accounts receivable                                                  (8)
    Inventories                                                          14 
    Prepaid expenses and other assets                                    (8)
    Payable to GLOBALFOUNDRIES                                         (151)
    Accounts payable, accrued liabilities and other                    (124)
                                                             -------------- 
Net cash used in operating activities                        $         (204)
                                                             -------------- 
                                                                            
Cash flows from investing activities:                                       
  Purchases of property, plant and equipment                            (21)
  Purchases of available-for-sale securities                           (310)
  Proceeds from sale and maturity of available-for-sale                     
   securities                                                           200 
                                                             -------------- 
Net cash used in investing activities                        $         (131)
                                                             -------------- 
                                                                            
Cash flows from financing activities:                                       
  Proceeds from issuance of common stock                                  1 
  Proceeds from borrowings, net                                         589 
  Repayments of long-term debt and capital lease obligations           (569)
  Other                                                                  (1)
                                                             -------------- 
Net cash provided by financing activities                    $           20 
                                                             -------------- 
Net decrease in cash and cash equivalents                              (315)
                                                             -------------- 
Cash and cash equivalents at beginning of period             $          869 
                                                             -------------- 
Cash and cash equivalents at end of period                   $          554 
                                                             -------------- 
                                                                            
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
SELECTED CORPORATE DATA                                                     
(Millions except headcount)                                                 
                                                                            
                                                  Quarter Ended             
----------------------------------------------------------------------------
                                      March 29,      Dec 28,      Mar. 30,  
Segment and Category Information        2014          2013          2013    
                                                                            
----------------------------------------------------------------------------
                                                                            
  Computing Solutions (1)                                                   
    Net revenue                     $       663   $       722   $       751 
    Operating loss                  $        (3)  $        (7)  $       (39)
                                                                            
  Graphics and Visual Solutions                                             
   (2)                                                                      
    Net revenue                             734           865           337 
    Operating income                         91           121            16 
                                                                            
  All Other (3)                                                             
    Net revenue                               -             2             - 
    Operating income (loss)                 (39)           21           (75)
                                                                            
  Total                                                                     
    Net revenue                     $     1,397   $     1,589   $     1,088 
    Operating income (loss)         $        49   $       135   $       (98)
                                                                            
----------------------------------------------------------------------------
                                                                            
Other Data                                                                  
                                                                            
  Depreciation and amortization,                                            
   excluding amortization of                                                
   acquired intangible assets       $        50   $        50   $        62 
  Capital additions                 $        21   $        21   $        20 
  Adjusted EBITDA (4)               $       139   $       165   $        40 
  Cash, cash equivalents and                                                
   marketable securities,                                                   
   including long-term marketable                                           
   securities                       $       982   $     1,187   $     1,183 
  Non-GAAP free cash flow (5)       $      (225)  $         0   $      (175)
  Total assets                      $     4,108   $     4,337   $     3,797 
  Total debt                        $     2,138   $     2,058   $     2,044 
  Headcount                              10,397        10,671         9,844 
                                                                            
----------------------------------------------------------------------------
                                                                            
  (1)  Computing Solutions segment primarily includes x86 microprocessors,  
       as standalone devices or as incorporated as an accelerated processing
       unit (APU), chipsets, embedded processors and dense servers.         
                                                                            
  (2)  Graphics and Visual Solutions segment primarily includes graphics    
       processing units (GPU), including professional graphics, semi-custom 
       System-on-Chip (SOC) products, development services and technology   
       for game consoles.                                                   
                                                                            
  (3)  All Other category primarily includes certain expenses and credits   
       that are not allocated to any of the operating segments. Also        
       included in this category are amortization of acquired intangible    
       assets and employee stock-based compensation expense. In addition,   
       the Company also included the following adjustments for the indicated
       periods: for the first quarter of 2014, the Company included         
       workforce rebalancing severance charges; for the fourth quarter of   
       2013, the Company included net legal settlements; and for the first  
       quarter of 2013, the Company included net restructuring and other    
       special charges. The Company also reports the results of former      
       businesses in the All Other category because the operating results   
       were not material.                                                   
                                                                            
  (4)  Reconciliation of GAAP operating income (loss) to Adjusted EBITDA*   
                                                                            
                                                 Quarter Ended              
                                    --------------------------------------- 
                                     March 29,      Dec 28,       Mar. 30,  
                                        2014          2013          2013    
                                    -----------   -----------   ----------- 
       GAAP operating income                                                
        (loss)                      $        49   $       135   $       (98)
         Workforce rebalancing                                              
          severance charges                  14             -             - 
         Legal settlements, net               -           (48)            - 
         Depreciation and                                                   
          amortization                       50            50            62 
         Employee stock-based                                               
          compensation expense               23            24            24 
         Amortization of acquired                                           
          intangible assets                   3             4             5 
         Restructuring and other                                            
          special charges, net                -             -            47 
                                    -----------   -----------   ----------- 
       Adjusted EBITDA              $       139   $       165   $        40 
                                    ===========   ===========   =========== 
                                                                            
                                                                            
  (5)  Non-GAAP free cash flow reconciliation**                             
                                                 Quarter Ended              
                                    --------------------------------------- 
                                     March 29,      Dec 28,       Mar. 30,  
                                        2014          2013          2013    
                                    -----------   -----------   ----------- 
       GAAP net cash provided by                                            
        (used in) operating                                                 
        activities                  $      (204)  $        21   $      (155)
         Purchases of property,                                             
          plant and equipment               (21)          (21)          (20)
                                    -----------   -----------   ----------- 
       Non-GAAP free cash flow      $      (225)  $         0   $      (175)
                                    ===========   ===========   =========== 
                                                                            
                                                                            
       * The Company presents Adjusted EBITDA as a supplemental measure of  
        its performance. Adjusted EBITDA for the Company is determined by   
        adjusting operating income (loss) for depreciation and amortization,
        employee stock-based compensation expense and amortization of       
        acquired intangible assets. In addition, the Company also included  
        the following adjustments for the indicated periods: for the first  
        quarter of 2014, the Company included an adjustment for workforce   
        rebalancing severance charges; for the fourth quarter of 2013, the  
        Company included an adjustment for net legal settlements; and for   
        the first quarter of 2013, the Company included net restructuring   
        and other special charges. The Company calculates and communicates  
        Adjusted EBITDA in the financial earnings press release because the 
        Company's management believes it is of importance to investors and  
        lenders in relation to its overall capital structure and its ability
        to borrow additional funds. In addition, the Company presents       
        Adjusted EBITDA because it believes this measure assists investors  
        in comparing its performance across reporting periods on a          
        consistent basis by excluding items that the Company does not       
        believe are indicative of its core operating performance. The       
        Company's calculation of Adjusted EBITDA may or may not be          
        consistent with the calculation of this measure by other companies  
        in the same industry. Investors should not view Adjusted EBITDA as  
        an alternative to the GAAP operating measure of operating income    
        (loss) or GAAP liquidity measures of cash flows from operating,     
        investing and financing activities. In addition, Adjusted EBITDA    
        does not take into account changes in certain assets and liabilities
        as well as interest and income taxes that can affect cash flows.    
                                                                            
       ** The Company also presents non-GAAP free cash flow in the earnings 
        press release as a supplemental measure of its performance. Non-GAAP
        free cash flow is determined by adjusting GAAP net cash provided by 
        (used in) operating activities for capital expenditures. The Company
        calculates and communicates non-GAAP free cash flow in the earnings 
        press release because the Company's management believes it is of    
        importance to investors to understand the nature of these cash      
        flows. The Company's calculation of non-GAAP free cash flow may or  
        may not be consistent with the calculation of this measure by other 
        companies in the same industry. Investors should not view non-GAAP  
        free cash flow as an alternative to GAAP liquidity measures of cash 
        flows from operating activities. The Company has provided           
        reconciliations within the press earnings release and financial     
        tables of these non-GAAP financial measures to the most directly    
        comparable GAAP financial measures.                                 
                                                                            

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Media Contact
Drew Prairie
512-602-4425

drew.prairie@amd.com

Investor Contact
Ruth Cotter
408-749-3887

ruth.cotter@amd.com