SUNNYVALE, CA--(Marketwired - Jan 20, 2015) - AMD ( NASDAQ : AMD ) today announced revenue for the fourth quarter of 2014 of $1.24 billion, operating loss of $330 million and net loss of $364 million, or $0.47 per share. Non-GAAP(1) operating income was $36 million, non-GAAP(1) net income of $2 million and breakeven non-GAAP(1) earnings per share.

GAAP Financial Results

Q4-14 Q3-14 Q4-13 2014 2013 Revenue $1.24B $1.43B $1.59B $5.51B $5.30B Operating income (loss) $(330)M $63M $135M $(155)M $103M Net income (loss) / Earnings (loss) per share $(364)M/$(0.47) $17M/$0.02 $89M/$0.12 $(403)M/$(0.53) $(83)M/$(0.11)

Non-GAAP Financial Results(1)

Q4-14 Q3-14 Q4-13 2014 2013 Revenue $1.24B $1.43B $1.59B $5.51B $5.30B Operating income (loss) $36M $66M $91M $235M $103M Net income (loss) / Earnings (loss) per share $2M/$0.00 $20M/$0.03 $45M/$0.06 $51M/$0.06 $(83)M/$(0.11)

"We made progress diversifying our business, ramping design wins and improving our balance sheet this past year despite challenges in our PC business," said Dr. Lisa Su, AMD president and CEO. "Annual Enterprise, Embedded and Semi-Custom segment revenue increased over 50% as customer demand for products powered by our high-performance compute and rich visualization solutions was strong. We continue to address channel headwinds in the Computing and Graphics segment and are taking steps to return it to a healthy trajectory beginning in the second quarter of 2015."

2014 Annual Results Revenue of $5.51 billion, up 4 percent year-over-year. Gross margin of 33 percent, down 4 percentage points year-over-year and non-GAAP (1) gross margin of 34 percent, down 3 percentage points year-over-year. Operating loss of $155 million and non-GAAP (1) operating income of $235 million, compared to GAAP and non-GAAP (1) operating income of $103 million in 2013.

Net loss of $403 million, loss per share of $0.53, and non-GAAP (1) net income of $51 million, non-GAAP (1) earnings per share of $0.06, compared to a GAAP and non-GAAP (1) net loss of $83 million, loss per share of $0.11 in 2013.







Q4 2014 Results Revenue of $1.24 billion, down 13 percent sequentially and 22 percent year-over-year. Gross margin of 29 percent and non-GAAP (1) gross margin of 34 percent. Gross margin was down 6 percentage points sequentially, primarily due to lower of cost or market inventory adjustment of $58 million related to our second-generation APU products. Non-GAAP (1) gross margin was down 1 percentage point sequentially. Q3 2014 gross margin of 35 percent included a $27 million, or 2 percent, benefit from revenue related to technology licensing. Operating loss of $330 million and non-GAAP (1) operating income of $36 million, compared to operating income of $63 million and non-GAAP (1) operating income of $66 million in Q3 2014. Net loss of $364 million, loss per share of $0.47, and non-GAAP (1) net income of $2 million, breakeven non-GAAP (1) earnings per share, compared to net income of $17 million, earnings per share of $0.02 and non-GAAP (1) net income of $20 million, non-GAAP (1) earnings per share of $0.03 in Q3 2014. Cash, cash equivalents and marketable securities were $1.04 billion at the end of the quarter, up $102 million from the end of the prior quarter. Total debt at the end of the quarter was $2.21 billion, flat from the prior quarter.







Financial Segment Summary

Computing and Graphics segment revenue decreased 15 percent sequentially and 16 percent from 2013. The sequential decrease was primarily due to lower desktop processor and GPU sales, and the annual decrease was driven by lower desktop processor and chipset sales. Operating loss was $56 million, compared with an operating loss of $17 million in Q3 2014 and operating loss of $15 million in Q4 2013. The sequential and year-over-year decreases were primarily driven by lower channel sales partially offset by lower operating expenses. Client average selling price (ASP) increased sequentially and year-over-year primarily driven by a richer mix of notebook processor sales. GPU ASP increased sequentially primarily due to higher desktop and notebook GPU ASPs and decreased year-over-year primarily due to a lower channel ASP.

Enterprise, Embedded and Semi-Custom segment revenue decreased 11 percent sequentially primarily driven by lower sales of semi-custom SoCs. Annual revenue increased 51 percent from 2013 primarily driven by increased sales of semi-custom SoCs. Operating income was $109 million compared with $108 million in Q3 2014 and $129 million in Q4 2013. The year-over-year decrease was primarily due to lower sales of semi-custom SoCs.

All Other category operating loss was $383 million compared with $28 million in Q3 2014 and operating income of $21 million in Q4 2013. The sequential and year-over-year decreases are primarily due to a $233 million goodwill impairment charge, $71 million restructuring and other special charges, net and a $58 million lower of cost or market inventory adjustment.





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 Q1 2015, AMD expects revenue to decrease 15 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 fourth quarter and annual financial results. AMD will provide a real-time audio broadcast of the teleconference on the Investor Relations page of its website at www.amd.com. The webcast will be available for 12 months after the conference call.

Reconciliation of GAAP to Non-GAAP Gross Margin

(Millions except percentages) Q4-14 Q3-14 Q4-13 2014 2013 GAAP gross margin $ 360 $ 494 $ 553 $ 1,839 $ 1,978 GAAP gross margin % 29% 35% 35% 33% 37% Lower of cost or market inventory adjustment $ 58 - - $ 58 - Non-GAAP gross margin $ 418 $ 494 $ 553 $ 1,897 $ 1,978 Non-GAAP gross margin % 34% 35% 35% 34% 37%

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

(Millions) Q4-14 Q3-14 Q4-13 2014 2013 GAAP operating income (loss) $ (330 ) $ 63 $ 135 $ (155 ) $ 103 Goodwill impairment 233 - - 233 - Restructuring and other special charges, net 71 - - 71 30 Lower of cost or market inventory adjustment 58 - - 58 - Amortization of acquired intangible assets 4 3 4 14 18 Workforce rebalancing severance charges - - - 14 - Legal settlements, net - - (48 ) - (48 ) Non-GAAP operating income $ 36 $ 66 $ 91 $ 235 $ 103

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

(Millions except per share amounts) Q4-14 Q3-14 Q4-13 2014 2013 GAAP net income (loss) / earnings (loss) per share $ (364 ) $ (0.47 ) $ 17 $ 0.02 $ 89 $ 0.12 $ (403 ) $ (0.53 ) $ (83 ) $ (0.11 ) Goodwill impairment 233 0.30 - - - - 233 0.30 - - Restructuring and other special charges, net 71 0.09 - - - - 71 0.09 30 0.04 Lower of cost or market inventory adjustment 58 0.07 - - - - 58 0.07 - - Amortization of acquired intangible assets 4 0.00 3 0.00 4 0.00 14 0.02 18 0.02 Workforce rebalancing severance charges - - - - - - 14 0.02 - - Loss on debt redemption - - - - - - 64 0.08 - - Legal settlements, net - - - - (48 ) (0.06 ) - - (48 ) (0.06 ) Non-GAAP net income (loss) / earnings (loss) per share $ 2 $ 0.00 $ 20 $ 0.03 $ 45 $ 0.06 $ 51 $ 0.06 $ (83 ) $ (0.11 )

About AMD

AMD ( NASDAQ : 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 earnings press release and the conference call remarks contain forward-looking statements concerning AMD; its expected first quarter of 2015 revenue; the trajectory of the Computing and Graphics segment; and the features, functionality and availability of its future products, 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 GLOBALFOUNDRIES, Inc. (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 the completion and impact of the 2014 restructuring plan and AMD's transformation initiatives could adversely affect AMD; 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 will 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 Quarterly Report on Form 10-Q for the quarter ended September 27, 2014.

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