AMD reports $1.2 mn Q3 loss; revenue falls 23% to $958 mn
20 Jan 2016
Advanced Micro Devices Inc has reported a net loss of $102 million, or 13 cents per share, in the fourth quarter ended 26 December 2015, against $364 million, or 47 cents per share, a year earlier.
Excluding items, the company lost 10 cents per share, in line with the average analysts' estimate.
Revenue for the quarter fell 22.7 per cent to $958 million but still came above analysts' expectation of $954.7 million.
For the three-month period ended 26 December, AMD reported revenue of $958 million, down from $1.24 billion a year earlier. Analysts had expected revenue of $955 million.
For the quarter ending 31 March, the company forecast a revenue decline of 14 per cent, "plus or minus 3 per cent," from the December quarter.
AMD's business that includes technology for game consoles - along with server and embedded processors and semi-custom products – said revenue dropped 15 per cent to $488 million, mostly driven by lower game console royalties and weaker revenue for server and embedded processors.
In the computing and graphics segment, which includes chips for personal computers, revenue fell 29 per cent to $470 million, as prices of processors used in notebook computers declined.
Overall, AMD posted a loss of $102 million, or 13 cents a share, compared with a year-earlier loss of $364 million, or 47 cents a share. Excluding stock-based compensation and other items, the per-share loss was 10 cents, compared with adjusted earnings of two cents a year earlier.
Gross margin, however, widened to 30 per cent from 29 per cent, as lower costs offset the decline in sales. Overhead costs fell 3.5 per cent, while research-and-development expenses dropped 24 per cent.
Sunnyvale, California-based AMD is for a long time trailed market leader Intel Corp in selling microprocessors for PCs. AMD has also been hurt by weaker demand for personal computers.
Though AMD has taken steps to diversify its business, its other markets including chips for videogame consoles from Sony Corp and Microsoft Corp have weakened.
AMD, which had sold off its chip manufacturing operations years ago, however, retained facilities in China and Malaysia that package and test products it designs.
In October last year, AMD unveiled a joint venture with a Chinese company that will provide a $371 million cash infusion and a possible reduction in AMD's spending in the future.
Under the joint venture pact, Nantong Fujitsu Microelectronics will acquire an 85 per cent stake in those operations and AMD will retain the remainder.
Shares of the company, which is in the process of selling some of its assets to cut costs, fell 6.2 per cent to $1.83 in recent after-hours trading.
AMD has been shifting to gaming consoles and low-power servers, but progress has lagged Wall Street expectations due to intense competition from Intel Corp and Nvidia Corp.
The company said a cautious macro environment in China would affect revenue in the first quarter. China accounted for 42.2 per cent of AMD's revenue in 2014.
