AMD Reports First Quarter Results
SUNNYVALE, Calif.--(BUSINESS WIRE)--
AMD (NYSE:AMD) today reported first quarter 2008 revenue of $1.505 billion, a net loss of $358 million, or $0.59 per share, and an operating loss of $264 million. These results include an impact of $50 million, or $0.08 per share, from ATI acquisition-related charges. First quarter revenue decreased 15 percent compared to the fourth quarter of 2007 and increased 22 percent compared to the first quarter of 2007. In the fourth quarter of 2007, AMD reported revenue of $1.770 billion, a net loss of $1.772 billion, and an operating loss of $1.678 billion. In the first quarter of 2007, AMD reported revenue of $1.233 billion, a net loss $611 million, and an operating loss of $504 million.
Reconciliation of GAAP Net Loss to Non-GAAP Net Loss(1)
(Millions except per share
amounts) Q1-08 Q4-07 Q1-07
---------------------------- ------------ --------------- ------------
GAAP net loss/EPS, less: $(358)(0.59) $(1,772)$(3.06) $(611)(1.11)
---------------------------- ------------ --------------- ------------
ATI acquisition-related
charges (50)(0.08) (1,669) (2.89) (113)(0.21)
---------------------------- ------------ --------------- ------------
Tax benefit from ATI
acquisition-related
charges - - 63 0.11 - -
---------------------------- ------------ --------------- ------------
Spansion investment
impairment - - (69) (0.12) - -
---------------------------- ------------ --------------- ------------
Total net charges (50)(0.08) (1,675) (2.89) (113)(0.21)
---------------------------- ------------ --------------- ------------
Non-GAAP net loss (1) $(308) - $ (97) - $(498) -
---------------------------- ------------ --------------- ------------
Reconciliation of GAAP Operating Loss to Non-GAAP Operating Loss(1)
(Millions) Q1-08 Q4-07 Q1-07
----------------------------------------------- ------ -------- ------
GAAP operating loss, less: $(264) $(1,678) $(504)
----------------------------------------------- ------ -------- ------
ATI acquisition-related charges (50) (1,669) (113)
----------------------------------------------- ------ -------- ------
Non-GAAP operating loss(1) $(214) $ (9) $(391)
----------------------------------------------- ------ -------- ------
"A seasonally weak first quarter was amplified by a challenging economic environment for consumers and lower than expected revenues of previous generation products, resulting in lower than expected revenues in all business segments. However, we are encouraged by the market acceptance of our Quad-Core AMD Opteron(TM) server processors as well as our new chipset and graphics offerings," said Robert J. Rivet, AMD's Chief Financial officer. "We remain committed to achieve operating profitability in the second half of the year, driven by our portfolio of new products and platforms and aggressive restructuring programs."
First quarter 2008 gross margin was 42 percent compared to 44 percent in the fourth quarter of 2007 and 28 percent in the first quarter of 2007. The decrease from the prior quarter was primarily due to decreased microprocessor unit shipments.
Segment Information
vs Q4- vs Q1-
(Millions) Q1-08 07 07
-------------------------------------------------------- ------ ------
Computing Solutions
-------------------------------------------------------- ------ ------
Revenue $ 1,194 -15% 30%
-------------------------------------------------------- ------ ------
Microprocessor Units - Down Up
-------------------------------------------------------- ------ ------
Microprocessor Average Selling Price (ASP) - Flat Flat
-------------------------------------------------------- ------ ------
Graphics
-------------------------------------------------------- ------ ------
Revenue $ 230 -11% 17%
-------------------------------------------------------- ------ ------
Units - Up Up
-------------------------------------------------------- ------ ------
Average Selling Price (ASP) - Down Flat
-------------------------------------------------------- ------ ------
Consumer Electronics
-------------------------------------------------------- ------ ------
Revenue $ 81 -26% -31%
-------------------------------------------------------- ------ ------
Total AMD
-------------------------------------------------------- ------ ------
Revenue $ 1,505 -15% 22%
-------------------------------------------------------- ------ ------
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.
In the seasonally down second quarter, AMD expects revenue to decrease in line with seasonality. As previously disclosed, AMD expects to record a restructuring charge in the second quarter of 2008.
Additional Quarterly Highlights
-- AMD began volume shipments of Quad-Core AMD Opteron processors.
Initial systems are available now from several customers including
Dell and HP and more platforms expected to be available in the
coming weeks from our largest global customers.
-- AMD launched seven new AMD Phenom(TM) processors, including:
-- AMD Phenom X4 9100e, the industry's first energy-efficient
desktop quad-core processor;
-- AMD Phenom X4 9850 Black Edition processor; and
-- AMD Phenom X3 8000 series, the world's first triple-core
processor.
-- AMD introduced the 780 Series chipset, the industry's most advanced
motherboard GPU and the first product capable of combining the
graphics power of integrated motherboard and discrete graphics to
deliver a better visual experience.
-- AMD introduced the ATI Radeon(TM) HD 3870 X2 graphics card
delivering leading performance for the enthusiast user and the ATI
Radeon HD 3400 and ATI Radeon HD 3600 series to provide outstanding
performance and unmatched value for the mainstream user. AMD also
announced software updates to enable the world's first quad-GPU
support.
-- AMD demonstrated its first 45nm quad-core processors for servers
and desktops.
-- AMD announced its first application processor for feature-rich
multimedia mobile phones, strengthened its portfolio of discrete
media processors, and expanded its handheld graphics IP offerings.
-- AMD introduced the ATI FireGL(TM) V7700, the first commercially
available 3D workstation graphics card with DisplayPort support,
and a new 2D workstation graphics card which delivers exceptional
energy efficiency and longevity.
AMD Teleconference
AMD will hold a conference call for the financial community at 2:00 p.m. PT (5:00 p.m. ET) today to discuss its first quarter financial results. AMD will provide a real-time audio broadcast of the teleconference on the Investor Relations page of its Web site at www.amd.com. The webcast will be available for 10 days after the conference call.
About AMD
Advanced Micro Devices (NYSE:AMD) is a leading global provider of innovative processing solutions in the computing, graphics and consumer electronics markets. AMD is dedicated to driving open innovation, choice and industry growth by delivering superior customer-centric solutions that empower consumers and businesses worldwide. For more information, visit www.amd.com.
Cautionary Statement
This release contains forward-looking statements concerning revenue for the second quarter of 2008, profitability for the second half of 2008 driven by new products and platforms, restructuring programs, and availability of platforms containing the Quad-Core AMD Opteron processor, 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 "would," "may," "expects," "believes," "plans," "intends," "projects," 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 targeting the company's business will prevent attainment of the company's current plans; the company will require additional funding and may not be able to raise funds on favorable terms or at all; the company's cost containment efforts will not be effective; customers stop buying the company's products or materially reduce their operations or demand for its products; the company will be unable to develop, launch and ramp new products and technologies in the volumes and mix required by the market and at mature yields on a timely basis; the company's competitors, customers and suppliers may take actions that will negate the anticipated benefits of the company's acquisition of ATI; demand for computers and consumer electronics products and, in turn, demand for the company's products will be lower than currently expected; global business and economic conditions will worsen, resulting in lower than currently expected revenue in the second quarter of 2008 and beyond; there will be unexpected variations in market growth and demand for the company's products and technologies in light of the product mix that it may have available at any particular time or a decline in demand; the company will be unable to transition to advanced manufacturing process technologies in a timely and effective way, consistent with planned capital expenditures; the company will be unable to maintain the level of investment in research and development and capacity that is required to remain competitive; and the company will be unable to obtain sufficient manufacturing capacity or components to meet demand for its products or will under-utilize its microprocessor manufacturing facilities. Investors are urged to review in detail the risks and uncertainties in the company's Securities and Exchange Commission filings, including but not limited to the Annual Report on Form 10-K for the year ended December 29, 2007.
AMD, the AMD Arrow logo, AMD Opteron, AMD Phenom and combinations thereof, and ATI, the ATI logo, FireGL and Radeon are trademarks of Advanced Micro Devices, Inc. Other names are for informational purposes only and used to identify companies and products and may be trademarks of their respective owners.
(1) In this press release, in addition to GAAP financial results, AMD has provided non-GAAP financial measures for operating loss and net loss to reflect its financial results without ATI acquisition-related charges (refer to footnote 4 of the financial tables for further details of these charges) for operating loss and in addition, for Q4-07 without the tax benefit from ATI acquisition-related charges and investment impairment charges for net loss. Management believes this non-GAAP presentation makes it easier for investors to compare current and historical period operating results.
ADVANCED MICRO DEVICES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Millions except per share amounts and percentages)
Quarter Ended
----------------------------------------------------------------------
Mar. 29, Dec. 29, Mar. 31,
2008 2007 2007
(Unaudited)(Unaudited)(Unaudited)
----------------------------------------------------------------------
Net revenue $1,505 $ 1,770 $1,233
Cost of sales 877 985 886
----------------------------------------------------------------------
Gross margin 628 785 347
Gross margin % 42% 44% 28%
Research and development 501 473 432
Marketing, general and
administrative 341 321 335
Amortization of acquired intangible
assets and integration charges 50 61 84
Impairment of goodwill and acquired
intangible assets - 1,608 -
----------------------------------------------------------------------
Operating income (loss) (264) (1,678) (504)
Interest income 15 19 16
Interest expense (95) (95) (78)
Other income (expense), net (1) 1 2
----------------------------------------------------------------------
Income (loss) before minority
interest, equity in net loss of
Spansion Inc. and other and income
taxes (345) (1,753) (564)
Minority interest in consolidated
subsidiaries (13) (9) (8)
Equity in net loss of Spansion Inc.
and other - (69) (16)
----------------------------------------------------------------------
Income (loss) before income taxes (358) (1,831) (588)
Provision (benefit) for income taxes - (59) 23
----------------------------------------------------------------------
Net income (loss) $ (358) $(1,772) $ (611)
----------------------------------------------------------------------
Net income (loss) per common share
Basic $(0.59) $ (3.06) $(1.11)
Diluted $(0.59) $ (3.06) $(1.11)
----------------------------------------------------------------------
Shares used in per share calculation
Basic 606 579 549
Diluted 606 579 549
ADVANCED MICRO DEVICES, INC.
CONSOLIDATED BALANCE SHEETS
(Millions)
Mar. 29, Dec. 29,
2008 2007(a)
(Unaudited)
----------------------------------------------------------------------
Assets
Current assets:
Cash, cash equivalents and marketable
securities $ 1,753 $ 1,889
Accounts receivable, net 538 640
Inventories 785 821
Prepaid expenses and other current assets 332 402
Deferred income taxes 105 64
----------------------------------------------------------------------
Total current assets 3,513 3,816
Property, plant and equipment, net 4,765 4,720
Goodwill 1,907 1,907
Acquisition related intangible assets, net 536 587
Other assets 487 520
----------------------------------------------------------------------
Total Assets $11,208 $11,550
======================================================================
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 944 $ 1,009
Accrued compensation and benefits 151 186
Accrued liabilities 946 821
Deferred income on shipments to
distributors 92 101
Current portion of long-term debt and
capital lease obligations 262 238
Other current liabilities 343 270
----------------------------------------------------------------------
Total current liabilities 2,738 2,625
Deferred income taxes 4 6
Long-term debt and capital lease obligations,
less current portion 5,025 5,031
Other long-term liabilities 615 633
Minority interest in consolidated
subsidiaries 189 265
Stockholders' equity:
Capital stock:
Common stock, par value 6 6
Capital in excess of par value 5,941 5,921
Retained earnings (deficit) (3,458) (3,100)
Accumulated other comprehensive income 148 163
----------------------------------------------------------------------
Total stockholders' equity 2,637 2,990
----------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $11,208 $11,550
======================================================================
(a)Amounts for the year ended December 29, 2007 were derived from the
December 29, 2007 audited financial statements.
ADVANCED MICRO DEVICES, INC.
SELECTED CORPORATE DATA
(Unaudited)
(Millions except headcount and percentages)
Quarter Ended
---------------------------------- ---------------------------------
Segment Information Mar. 29, Dec. 29, Mar. 31,
2008 2007 2007
---------------------------------
---------------------------------- --------- --------- ---------
Computing Solutions (1)
Net revenue $ 1,194 $ 1,402 $ 918
Operating income (loss) $ (160) $ 21 $ (321)
Graphics (2)
Net revenue 230 259 197
Operating income (loss) (11) (12) (35)
Consumer Electronics (3)
Net revenue 81 109 118
Operating income (loss) (8) 12 (4)
All Other (4)
Net revenue - - -
Operating income (loss) (85) (1,699) (144)
Total AMD
Net revenue $ 1,505 $ 1,770 $ 1,233
Operating income (loss) $ (264) $(1,678) $ (504)
---------------------------------- - ---------------------- -------- -
Other Data
---------------------------------
Depreciation & amortization
(excluding amortization of
acquired intangible assets) $ 267 $ 273 $ 243
Capital additions $ 323 $ 267 $ 586
Headcount 16,398 16,420 16,745
---------------------------------- - ---------------------- -------- -
Adjusted EBITDA (5) $ 54 $ 203 $ (196)
---------------------------------
---------------------------------- - ---------------------- -------- -
(1)Computing Solutions segment includes microprocessors, chipsets and
embedded processors.
(2)Graphics segment includes graphics, video and multimedia products
developed for use in desktop and notebook computers, including
home media PCs, professional workstations and servers.
(3)Consumer Electronics segment includes products for and revenue
related to mobile phones and PDAs, digital televisions and other
consumer electronics and royalties received in connection with the
sale of game console systems that incorporate the Company's
technology.
(4)All Other category includes employee stock-based compensation
expense and certain operating expenses and credits that are not
allocated to the operating segments. Also included in this
category are the ATI acquisition-related charges. Details of the
ATI acquisition-related charges and employee stock-based
compensation expense are shown below.
ATI acquisition-related charges: Employee stock-based
compensation expense:
Quarter Ended Quarter Ended
Q108 Q407 Q107 Q108 Q407 Q107
------ -------- ------ ---- ---- ----
Amortization
of acquired
intangible
assets $ 50 $ 58 $ 71 Cost of sales $ 3 $ 3 $ 2
Integration Research and
charges - 3 13 development 16 12 14
------ -------- ------
Subtotal Marketing,
general and
$ 50 $ 61 $ 84 administrative 2 11 12
---- ---- ----
Impairment of
goodwill and
acquired
intangible
assets - 1,608 - $21 $26 $28
==== ==== ====
Cost of fair
value
adjustment
of acquired
inventory - - 29
------ -------- ------
ATI
acquisition-
related
charges $ 50 $ 1,669 $ 113
(5) Reconciliation of Net income (loss)
to Adjusted EBITDA(a)
Quarter Ended
Q108 Q407 Q107
------ -------- ------
Net income
(loss) $(358) $(1,772) $(611)
Depreciation
and
amortization 267 273 243
Amortization
of acquired
intangible
assets 50 58 71
Impairment of
goodwill and
acquired
intangible
assets - 1,608 -
Interest
expense 95 95 78
Provision
(benefit)
for income
taxes - (59) 23
------------------- -------- ------
Adjusted
EBITDA $ 54 $ 203 $(196)
====== ======== ======
(a)The Company defines Adjusted EBITDA as net income (loss) adjusted
for depreciation and amortization, amortization of acquired
intangible assets, impairment of goodwill and acquired
intangible assets, interest expense and taxes. The Company
calculates and communicates Adjusted EBITDA because management
believes it is of interest to investors and lenders in relation
to its overall capital structure and its ability to borrow
additional funds. The Company's calculation of Adjusted EBITDA
may or may not be consistent with the calculation of this
measure by other companies in the same industry. Investors
should not view Adjusted EBITDA as an alternative to the U.S.
GAAP operating measure of net income or U.S. GAAP liquidity
measures of cash flows from operating, investing and financing
activities. In addition, Adjusted EBITDA does not take into
account changes in certain assets and liabilities as well as
interest and income taxes that can affect cash flows.
Source: Advanced Micro Devices Inc.
Released April 17, 2008