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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  • Tchamber - Thursday, October 15, 2015 - link

    We've been reading about quarterly losses for years now. It'll be a sad day indeed when they close up shop. I'd hate to see them go out of business, maybe some one will buy them out.
  • Wreckage - Thursday, October 15, 2015 - link

    If someone wanted to buy them out, they would have already. Right now it's not a matter of if AMD will go out of businesses, it's just a matter of when. Their financial situation is not sustainable and is not improving.
  • Jtaylor1986 - Thursday, October 15, 2015 - link

    They can limp along until Zen comes out. If Zen doesn't get traction it will likely be game over for the CPU division.
  • ddriver - Friday, October 16, 2015 - link

    Don't worry, intel wont let that happen, I mean the sole purpose behind amd's existence is to hide intel's monopolyl
  • Dobson123 - Friday, October 16, 2015 - link

    Not anymore.
  • ddriver - Friday, October 16, 2015 - link

    Intel is still a de facto monopoly in the CPU world. And there is nothing on the horizon to suggest this will change any time soon. ARM chips are still a niche product, and even though they do have ample performance to satisfy a good part of the desktop and mobile PC market, "somehow" that is not happening. I suppose this has to do with intel's long running practice of sneaky anti-competitive behavior. At the kind of margins ARM chips are selling, I guess their makers simply don't have the cash to buyoff OEMs.
  • Genx87 - Friday, October 16, 2015 - link

    Compare the unit numbers between x86 and ARM. Intel is not a monopoly in the CPU business. For instance 3.5 billion ARM chips were shipped in Q4 2014 compared to 81 million for all PC shipments. Tack on server and x86 mobile. They may hit 150 million units in Q4 between Intel and AMD.
  • eanazag - Friday, October 16, 2015 - link

    Intel is effectively a monopoly in some very key areas. Server and laptop mobile businesses. If you look at the prices of server chips, they are out of control. $3000 each for a 2P server in CPU alone. Intel has been competing against itself in the server CPU market for a couple of years now. That would happen in the laptop and desktop market too without AMD. I think the laptop market is only one AMD is close to competing in.

    AMD gives us no solid reason to think Zen will be any different than any other underperforming CPU launch they have had in recent years. We can expect to hear "it's a good product if it came out a year and half ago".
  • ddriver - Friday, October 16, 2015 - link

    AMD is not competition to Intel, you know, competition implies the actual ability to compete, and AMD cannot. AMD just creates the illusion for competition in the x86 market, thus it is needed and will not go down.

    Intel has ruined AMD for over a decade using illegal anticompetitive practices, and has reduced AMD to a crippled, impotent, pseudo competitor, put right there where Intel needs it to be. The last several generations of Intel CPUs have barely improved on performance, absent a competitor Intel is taking its sweet time, being careful to ensure it doesn't pull ahead too much to end AMD and lose its "competition".

    AMD doesn't compete with Intel, it just has to do with the scraps Intel leaves for it, because the profit margins aren't worth Intel's effort. AMD is as much competition to Intel as maggots are competition to lions, just because they feed on the same carcass doesn't make them competition, the maggots are there to clear out what the lions won't be bothered with.
  • SeanJ76 - Tuesday, October 27, 2015 - link

    AMD has never been a competitor for Intel, AMD builds cheap garbage for welfare/broke ass gamers.......

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