10-QPeriod: Q2 FY2010

ADVANCED MICRO DEVICES INC Quarterly Report for Q2 Ended Jun 26, 2010

Filed August 4, 2010For Securities:AMD

Summary

For the second quarter ended June 26, 2010, Advanced Micro Devices, Inc. (AMD) reported a significant year-over-year increase in net revenue, reaching $1.65 billion, a 40% rise compared to $1.18 billion in the same period of the prior year. This growth was driven by strong demand across its Computing Solutions and Graphics segments. The company also achieved a positive operating income of $125 million, a substantial improvement from the operating loss of $249 million in the second quarter of 2009, reflecting improved gross margins and operational efficiencies. A key development during the period was the deconsolidation of GLOBALFOUNDRIES (GF) as of December 27, 2009, leading to a significant non-cash gain recognized in the first quarter of 2010 and impacting year-over-year comparisons. AMD ended the quarter with $1.9 billion in cash, cash equivalents, and marketable securities, providing a solid liquidity position despite ongoing long-term debt obligations.

Financial Highlights

52 data points
Beta

Revenue

$1.65B

44.6% Gross Margin

Net Income

-$43.00M

-2.6% Net Margin

EPS (Diluted)

$0.06

Total Assets

$4.96B

Cash & Equivalents

$1.08B

Free Cash Flow

-$129.00M

Financial Statements
Beta
Revenue$1.65B
Cost of Revenue$915.00M
Gross Profit$738.00M
R&D Expenses$371.00M
SG&A Expenses$229.00M
Operating Income$125.00M
Interest Expense$55.00M
Net Income-$43.00M
EPS (Basic)$0.06
EPS (Diluted)$0.06
Shares Outstanding (Basic)709.00M
Shares Outstanding (Diluted)709.00M

Key Highlights

  • 1Net revenue increased 40% year-over-year to $1.65 billion, driven by strong demand in Computing Solutions and Graphics segments.
  • 2Achieved positive operating income of $125 million, a significant improvement from a $249 million loss in the prior year's quarter.
  • 3Gross margin improved to 45% from 37% year-over-year, benefiting from improved manufacturing utilization and product mix.
  • 4The deconsolidation of GLOBALFOUNDRIES (GF) in late 2009 continues to impact financial comparisons but resulted in a significant non-cash gain recognized earlier.
  • 5Cash, cash equivalents, and marketable securities stood at $1.9 billion, indicating a healthy liquidity position.
  • 6The company repurchased $216 million in principal amount of its 6.00% Convertible Senior Notes during the first six months of 2010.
  • 7Announced a tender offer for up to $800 million of its 6.00% Notes and issued $500 million in new Senior Notes shortly after the reporting period.

Frequently Asked Questions

AMD reported net revenue of $1.65 billion for the second quarter ended June 26, 2010, which represents a significant 40% increase compared to $1.18 billion in the same quarter of the previous year. This growth was primarily driven by strong demand in both its Computing Solutions and Graphics segments.

AMD showed a substantial improvement in profitability, reporting an operating income of $125 million for the second quarter of 2010, a significant turnaround from an operating loss of $249 million in the second quarter of 2009. This improvement was driven by higher revenues and an enhanced gross margin of 45%.

AMD deconsolidated GLOBALFOUNDRIES (GF) as of December 27, 2009, meaning GF's financial results are no longer fully included in AMD's consolidated statements. While this deconsolidation resulted in a significant non-cash gain recognized in the first quarter of 2010, it also means that direct year-over-year comparisons for certain periods and metrics need to consider this change in accounting treatment. The company now accounts for its investment in GF using the equity method.

AMD ended the quarter with a strong liquidity position, holding $1.9 billion in cash, cash equivalents, and marketable securities. The company actively managed its debt during the period, repurchasing $216 million of its 6.00% Convertible Senior Notes. Subsequent to the quarter, AMD announced a tender offer to repurchase up to $800 million of its 6.00% Notes and issued $500 million in new Senior Notes to finance these activities.