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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  • sheeple - Monday, October 19, 2015 - link

    AMD Radeon Nano comes to mind at right now it is THE ABSOLUTE BEST GFX CARD IN IT'S LONELY MINI-ITX CLASS, PERIOD! Unfortunately, it's also a niche product and is already sold-out and apparently AMD can't make enough for the demand, AWESOME PRODUCT, insufficient supply=:(
  • Nagorak - Friday, October 16, 2015 - link

    I'm less and less certain that Zen is going to be enough to save them. Even if they almost achieve parity in performance and efficiency with Intel, is there enough of a following for their brand to get people to buy it?
  • RussianSensation - Friday, October 16, 2015 - link

    You are assuming most consumers buy simply based on brand, with complete disregard to performance and price? AMD doesn't have to outright beat $300-1000 i7s to make sense. The market for $50-250 CPUs is huge and that's where Intel has the weakest offerings. Think about it, imagine 8 full-fledged cores with IPC around Sandy Bridge going against an 4-core i5? A lot of people would choose the full 8-core CPU for $250.
  • nofumble62 - Friday, October 16, 2015 - link

    Yes, don't just talk, bring it in, people have been waiting for years, nothing shown up.
  • mapesdhs - Saturday, October 17, 2015 - link

    Trouble is, AMD released what it called an 8-core CPU but was infact a 4-module CPU (2int/1fp per module); decent for threaded int, but it sucked for FP and its IPC was terrible, worse than the old Ph2. They've never caught up since then. They would have done better simply if they's shrunk the existing Ph2 design, added two more cores, tweaked it a bit and brought it out much earlier. Instead, AMD fans waited for ages and ended up with the poop pile that was BD. I remember seeing relevant mbds on eBay the very next day from disgruntled buyers. Again and again they promise but never deliver. I really hope they can turn it around with Zen, but past indications suggest otherwise. Likewise, I thought the Fury Nano would give NVIDIA a kick up the butt, but instead it turned out to be a grossly overpriced niche-market card with too little RAM, aimed at 4K users who if they had any sense would never buy anything that lacked HDMI 2.0.

    My first PC build was an AMD, 6000+, excellent value at the time. First GPU was an AMD, an X1950 Pro AGP, again a great card back then. But over time, bit by bit, the advantages on price, performance, etc. have dwindled, and meanwhile drivers have become a joke.

    Sure, some company like IBM or Samsung could buy out AMD, but why the heck would they?

    And those who have convinced themselves that Zen will save the day are assuming Intel hasn't held anything back in reserve. Of course they have; Intel's been sitting on its butt for ages, ever since SB. They could release something way better than the consumer chips we have now; we know this is true because they already did, or do I have to remind people yet again? The 3930K *was* an 8-core CPU, just with 2 cores disabled. Intel didn't release an 8-core back then because they didn't have to. That was still the case when IB-E came around, and it's again why they didn't offer a mid-range 8-core with HW-E. They're holding back, because they can. If Zen does turn out to in any way have some decent performance, mark my words, Intel will ramp up their product line with a vengeance.

    The only reason why AMD hasn't been allowed to die is because that would mean writing off an awful lot of debt, and the people who own that debt do not want to do that, for obvious reasons.
    AMD's long term debt has been much higher in the past (peaked at $5B in 2007), but atm it's $2B and it hasn't changed in
  • Jumangi - Friday, October 16, 2015 - link

    Yikes the continuing decline of their gross margins is frightening.
  • vision33r - Monday, October 19, 2015 - link

    AMD better watch out because Apple's mobile SOC is increasing processing power year after year and is predicted to beat AMD in processing power and eventually become competitive enough against Intel's mobile processors.
  • SeanJ76 - Tuesday, October 27, 2015 - link

    AMD's days are coming to a close, with those numbers, they'll be lucky to stay in business through 2017....

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