ADVANCED MICRO DEVICES INC Quarterly Report for Q3 Ended Sep 26, 2009

Summary

Advanced Micro Devices, Inc. (AMD) reported net revenue of $1,396 million for the third quarter of 2009, a decrease of 22% compared to $1,797 million in the same quarter of the prior year. This decline was attributed to lower average selling prices, particularly for microprocessors and GPU products, driven by a shift towards more value-priced offerings. The company posted an operating loss of $77 million, a significant drop from the $122 million operating income in Q3 2008, primarily due to lower revenues and increased interest expenses related to GLOBALFOUNDRIES (GF) debt. Despite the revenue decline and operating loss, AMD reported improved cash and cash equivalents, reaching $2.5 billion, bolstered by financing activities related to the GF joint venture. The company continues to manage costs through restructuring efforts, showing a decrease in R&D and SG&A expenses. However, the overall financial performance reflects the challenging semiconductor market and ongoing integration of the GF venture.

Key Highlights

• 1Net revenue decreased by 22% year-over-year to $1,396 million, impacted by lower average selling prices.
• 2The company reported an operating loss of $77 million, a reversal from the $122 million operating income in the prior year's quarter.
• 3Interest expense increased significantly due to new debt from GLOBALFOUNDRIES.
• 4Cash, cash equivalents, and marketable securities increased to $2.5 billion, largely due to the GLOBALFOUNDRIES transaction.
• 5Cost reduction initiatives led to lower R&D and SG&A expenses.
• 6GLOBALFOUNDRIES (GF) was consolidated following a March 2009 transaction, contributing $256 million in revenue and an operating loss of $101 million in the quarter.
• 7The company repurchased a significant portion of its 6.00% Convertible Senior Notes, realizing a substantial gain of $66 million in other income.

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