01—Abstract
Summary
Summary of the 10-Q filed August 5, 2009. Cited figures are marked; the original filing is the authoritative source.
Advanced Micro Devices, Inc. (AMD) reported a net loss of $335 milliona for the second quarter ended June 27, 2009, or $0.49 per share.
This represents an improvement from the $1.19 billionb net loss in the same quarter last year, though revenue declined year-over-year. The company's financial results for this period were significantly impacted by the recent formation of its GLOBALFOUNDRIES (GF) manufacturing joint venture with ATIC. The GF transaction, which closed in March 2009, brought in substantial cash and changed the company's operational and reporting structure.
While overall revenues saw a year-over-year decrease, the company highlighted stabilization in PC demand and cost reduction efforts. AMD's balance sheet showed a stronger cash position, with $2.5 billionc in cash and marketable securities at the end of the quarter, up from $1.1 billion at the end of the prior year. This increase was largely attributed to the GF transaction.
Despite the revenue decline and continued operating losses, the company is focusing on cash preservation and cost containment measures. Investors will be closely watching the integration and performance of GLOBALFOUNDRIES, as well as AMD's ability to navigate the challenging macroeconomic environment and competitive semiconductor market.
02—Key points
Key Highlights
- Net loss of $335 million ($0.49 per share) for the quarter, an improvement from $1.19 billion loss in Q2 2008.
- Total net revenue of $1.18 billion, a decrease from $1.36 billion in Q2 2008.
- Cash, cash equivalents, and marketable securities increased to $2.5 billion from $1.1 billion, largely due to the GLOBALFOUNDRIES (GF) transaction.
- Operating loss of $249 million, an improvement from $569 million in Q2 2008, aided by lower operating expenses and absence of significant impairment charges.
- GLOBALFOUNDRIES (GF) joint venture, formed in March 2009, now reported as a separate segment, contributing $253 million in revenue and a $101 million operating loss for the quarter.
- Significant decrease in Marketing, General, and Administrative expenses, down 26% year-over-year, reflecting cost-cutting initiatives.
- Stock-based compensation expenses remained flat year-over-year at $18 million.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q2 FY2009, Advanced Micro Devices Inc lost $0.28.
- Revenue$1.18B100.0%
- Cost of revenue−$743.0M62.8%
- Gross profit$441.0M37.2%
- Operating costs−$690.0M58.3%
- Operating income−$249.0M21.0%
- Interest, other & tax−$81.0M6.8%
- Net income−$330.0M27.9%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2009filed August 5, 2009Financial Statements
| Revenue | $1.18B |
| Cost of Revenue | $743.00M |
| Gross Profit | $441.00M |
| R&D Expenses | $425.00M |
| SG&A Expenses | $247.00M |
| Operating Income | -$249.00M |
| Interest Expense | $108.00M |
| Net Income | -$330.00M |
| EPS (Basic) | $-0.49 |
| EPS (Diluted) | $-0.49 |
| Shares Outstanding (Basic) | 667.00M |
| Shares Outstanding (Diluted) | 667.00M |
05—Questions
Frequently Asked Questions
What is the main reason for the year-over-year revenue decline?
The year-over-year revenue decline of 13% to $1.18 billion was primarily due to lower average selling prices, particularly in the Computing Solutions segment, as customers shifted towards more value-priced products. This was partially offset by an increase in unit shipments.
How has the formation of GLOBALFOUNDRIES (GF) impacted AMD's financial results?
The formation of the GF joint venture in March 2009 significantly impacted AMD's financial position by bringing in substantial cash ($2.5 billion in total cash and marketable securities at quarter-end). GF is now reported as a separate segment, contributing $253 million in revenue and incurring an operating loss of $101 million for the quarter. The noncontrolling interest related to ATIC's stake in GF is presented outside of stockholders' equity.
What is the company's outlook on costs and cash flow?
AMD continues to focus on preserving cash and implementing cost-containment measures. Marketing, General, and Administrative expenses saw a significant year-over-year reduction of 26%. The company believes its current cash position, combined with anticipated cash flow from operations and financing from ATIC for GF, will be sufficient to fund operations and capital investments over the next twelve months.
06—Continue