Today AMD has announced their third quarter earnings for fiscal year 2015. AMD saw a 13% increase in revenue over Q2 2015, but revenues were down almost 26% over their Q3 2014 numbers. Revenue for the quarter was $1.06 billion USD, down from $1.43 billion a year ago. AMD continues to use GAAP and Non-GAAP earnings to help show the state of the business in greater detail. On a GAAP basis, AMD had an operating loss of $158 million for the quarter, and a $197 million net loss, which works out to $0.25 per share. Compared to last quarter, both losses were larger despite the increased revenue, and the numbers are down significantly over the $17 million net income a year ago.

AMD Q3 2015 Financial Results (GAAP)
  Q3'2015 Q2'2015 Q3'2014
Revenue $1.06B $942M $1.43B
Gross Margin 23% 25% 35%
Operating Income -$158M -$137M $63M
Net Income -$197M -$181M $17M
Earnings Per Share -$0.25 -$0.23 $0.02

On a Non-GAAP basis, AMD had a $97 million operating loss, which is once again a larger loss than last quarter, and down 211% from the $87 million in operating income last year. Net loss was $136 million, or $0.17 per share, compared to a $41 million net profit and $0.05 per share last year. GAAP to Non-GAAP differences are due to $48 million in restructuring fees and $13 million in stock based compensation.

AMD Q3 2015 Financial Results (Non-GAAP)
  Q3'2015 Q2'2015 Q3'2014
Revenue $1.06B $942M $1.43B
Gross Margin 23% 28% 35%
Operating Income -$97M -$87M $87M
Net Income -$136M -$131M $41M
Earnings Per Share -$0.17 -$0.17 $0.05

The Computing and Graphics segment continues to struggle, although AMD did see stronger sequential growth here with the recent launch of Carrizo. Revenue increased 12% over last quarter, although it is still down 46% year-over-year. This segment had an operating loss of $181 million for the quarter, up from a loss of $147 million last quarter and a loss of $17 million a year ago. Sequentially, the loss is mostly attributed to a write-down of $65 million which AMD is taking on older-generation products. Annually, the decrease is due to lower overall sales. Unlike Intel, AMD processors had a decrease in Average Selling Price (ASP) both sequentially and year-over-year, so there was no help there from the lower sales volume. The GPU ASP was a different story, staying flat sequentially and increasing year-over-year. Recent launches of new AMD graphics cards have helped here.

AMD Q3 2015 Computing and Graphics
  Q3'2015 Q2'2015 Q3'2014
Revenue $424M $379M $781M
Operating Income -$181M -$147M -$17M

The Enterprise, Embedded, and Semi-Custom segment had a better showing. Revenue increased 13% over last quarter, and was down only 2% year-over-year. Semi-custom sales (read Consoles) drove the sequential increase but lower embedded and server processor sales caused a year-over-year decline. Operating income for this segment came in at $84 million, up from $27 million in Q2 but down from $108 million in Q3 2014. Q2’s numbers were skewed though by a $33 million hit on moving to a new process node.

AMD Q3 2015 Enterprise, Embedded and Semi-Custom
  Q3'2015 Q2'2015 Q3'2014
Revenue $637M $563M $648M
Operating Income $84M $27M $108M

All Other had an operating loss of $61 million for the quarter, up from $17 million loss in Q2 and a $28 million loss in Q3 2014. This is where they stick their “restructuring charges” and they nicely align with the GAAP vs Non-GAAP values.

The bad news doesn’t stop here either. We’ve seen the departure of a couple of key people at AMD, and AMD is also spinning off some of the company. Revenues for Q4 are expected to decrease an additional 10%, plus or minus 3%, compared to today’s numbers. AMD is doing more corporate restructuring in an attempt to reduce expenses further. Perhaps the most troubling aspect of today’s results is their gross margin is only 23%. They really need closer to 35% for profitability and are a long way from that today.

Source: AMD Investor Relations

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  • SeanJ76 - Tuesday, October 27, 2015 - link

    AMD doesn't know how to build processors, PERIOD!
  • ddriver - Friday, October 16, 2015 - link

    3.5 billion ARM chips? That has got to include microcontrollers, which do not even go in the CPU category.

    Those numbers don't mean anything, seeing how 90% of the PC systems come with intel chips, if they have 90% of the market, I'd say they well qualify for a monopoly.
  • HighTech4US - Friday, October 16, 2015 - link

    It is NOT illegal to be a monopoly in the US.

    So Intel has no reason to save AMD.

    Quote: No. Monopolies are perfectly legal, even under Sherman. What is illegal is using a monopoly or trust (A 'trust', in Sherman is what we would today typically call a cartel) to manipulate price and availability of a product or service.

    The governments decision to break up AT&T, for example, was based not on the fact that it was a monopoly, but on the allegation that AT&T was using its monopoly position to artificially hike prices and keep prospective competitors out of the market.
  • ddriver - Saturday, October 17, 2015 - link

    I never said it is illegal ;) Why should it be, seeing how monopolies are running the world, it would make zero sense for them to outlaw themselves.
  • xenol - Sunday, October 18, 2015 - link

    If I could upvote you, I could.

    People don't realize that there are monopolies everywhere. Most of your utilities come from a single company. The government keeps a leash on them to make sure they aren't jacking up prices just because.
  • kaesden - Saturday, October 17, 2015 - link

    As much as intel needs AMD as a facade to hide their monopoly, AMD simply cannot sustain for much longer losing 100M+ per quarter. Eventually they will go bankrupt. Someone may buy them out, but there are issues with the x86 license from intel that will prevent an aquisition from being able to produce CPU's. This also would make nvidia a monopoly since no AMD means no more competition on any products. Prices will skyrocket and with the complexity of creating cpu and gpu components, there no chance of a new startup ever happening that would provide any competition, so once AMD is gone, the computer industry will be at the mercy of Intel, and the gaming industry at the mercy of nvidia with no chance for change happening again.
  • ddriver - Monday, October 19, 2015 - link

    AMD is always losing money. The last 10 years they only have 2 in the green. AMD keeps losing money, and quite frankly to me it is a mystery how come it is still alive and where does this money come from. Either than have captured a family of leprechauns or someone is paying to keep it alive. Note the numbers:

    1999: -90 mil
    2000: 983
    2001: -60
    2002: -1300
    2003: -275
    2004: 91
    2005: 165
    2006: -166
    2007: -3380
    2008: -3100
    2009: 304
    2010: 471
    2011: 491
    2012: -1180
    2013: -83
    2014: -403
    2015: -922

    Since 1999 AMD's business has resulted in a loss of about 8.5 billion $. It has also lost its fabs, and is now worth a fraction of what they overpaid for ATI.

    It is quite clear that AMD has not and will not make money. The reasonable thing would be to terminate it, and yet it keeps on going and burning money, and my guess is the reason for this is no other than to hide Intel's monopoly.
  • Chaser - Monday, October 19, 2015 - link

    Enthusiasts have been waiting for the resurgence of a competitive AMD CPU and are placing their hopes in Zen. But enthusiasts are but a small segment. We may view Zen as a potential saving grace that doesn't mean it will magically transform AMD to a profitable corporation.
  • nofumble62 - Friday, October 16, 2015 - link

    true. No one would buy a company with no talent left.
  • eanazag - Friday, October 16, 2015 - link

    AMD has talent, but no to depleted leadership.

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