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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  • duploxxx - Friday, October 16, 2015 - link

    The problem is not only the consumer and IT rep.

    Even if AMD would have decent products it would only sell partially because of the brand recognition. On top of that there are a whole count of business that are only willing to buy certain chips of certain brand, better or worse they don't care.

    last but not least, nice to blame oem about design, but how do you think those designs are "funded", oem r&d is not solely oem payed.... AMD has no chance to survive in this business and it should be mainly consumer and IT to blaim, lots of AMD parts that were good in the mid - low range were/are still good to buy, yet people choose an intel.... I can buy a 16core AMD cpu for less then a 8 core HT Intel, same for the 12 core vs 6 core or 8 core vs 4 core the amd is faster in many ways and only marginally more power consuming, yet IT everywhere chooses Intel ..... many things is anandtech and others to blame, artificial benchmarks, only showing high end cpu with big results, HT that is suppose to do magic while in reality it is marginal better (not to mention you have to pay an arm and leg for those high end way over priced cpu's....) My company has done many maths for several years and benchmarking, we are still running all our server based on AMD. Price/perf they are still more then ok for low mid range. Unless there are *** that think they need those 269x series for everyting is a ***** and those are so expensive that any price/perf is way out of the blue, your better of buying a flash array, IT farmis not lacking cpu power in 95% of the cases.
  • D. Lister - Friday, October 16, 2015 - link

    Wow, a fan of AMD CPUs is quite a novelty these days.
  • duploxxx - Friday, October 16, 2015 - link

    not fan, just plain dumb reality. we use about 25000 workstations and 1000 servers a year with petabytes of storage. we do know how OEM and there providers work....
  • zodiacfml - Friday, October 16, 2015 - link

    I agree. The simple problem for AMD is just Intel having the latest node process. The difference before was a few months till the gap kept going larger. 14nm versus 28nm? No CPU architecture can compete with that kind of gap. Not only does a lower process improve performance and power, it also provided increased profit as Intel's chips are gradually becoming smaller despite the large integrated graphics.
  • RussianSensation - Friday, October 16, 2015 - link

    @ zodiacfml

    Hats off to you! One of the most solid non-biased points in this thread. What people forget is that even if AMD had the world's best CPU architecture, no architecture can overcome being so many nodes behind. For years and years the AMD bashers have ignored this basic fundamental fact always blaming AMD for failing to compete with Intel. Fact is no one in the world can compete with Intel in the x86 space because no one can design a CPU with similar IPC to Intel + have access to the world's most cutting edge fabs at the same time. ARM? Solid product for smartphones and tablets but hopelessly outclassed when it comes to performance PCs.
  • extide - Friday, October 16, 2015 - link

    AMD server CPU's are still on 32nm!
  • sheeple - Monday, October 19, 2015 - link

    Nothing wrong with 32 nm, it is on the way to 1nm, as it's sub 50 nm. Heck, even 45 nm is STILL in wide use today, so your stupidly offensive point is???
  • extide - Friday, November 6, 2015 - link

    The point is that their current most competitive part is 2+ generations back from the rest of the competition. Who cares about people still running decade old chips? That has nothing to do with this.
  • sheeple - Monday, October 19, 2015 - link

    EVEN 65 nm is STILLL in wide use as well, evidence the LEGENDARY of the MOST POPULAR CPU'S and uses 65 nm!!! LOL!!!
  • medi01 - Friday, October 16, 2015 - link

    AMD's GPUs are quite competitive.
    CPUs only in low end.

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