10-QPeriod: Q2 FY2013

ADVANCED MICRO DEVICES INC Quarterly Report for Q2 Ended Jun 29, 2013

Filed August 1, 2013For Securities:AMD

Summary

Advanced Micro Devices, Inc. (AMD) reported its financial results for the second quarter and first six months of fiscal year 2013, ending June 29, 2013. The company experienced a significant decline in net revenue compared to the prior year, with Q2 2013 revenue at $1.16 billion, down 18% from $1.41 billion in Q2 2012. For the six-month period, revenue was $2.25 billion, a decrease from $3.00 billion in the same period last year. This revenue decline was primarily driven by challenging market conditions in the computing solutions segment and to a lesser extent, graphics and visual solutions. The company reported a net loss of $74 million ($0.10 per diluted share) for the second quarter of 2013, a stark contrast to a net income of $37 million ($0.05 per diluted share) in the prior year's quarter. For the first six months of 2013, the net loss widened to $220 million ($0.29 per diluted share) from a loss of $553 million ($0.75 per diluted share) in the first half of 2012. Operating expenses saw reductions due to restructuring efforts, but the overall financial performance indicated ongoing challenges in its core markets.

Financial Highlights

55 data points
Beta

Revenue

$1.16B

39.5% Gross Margin

Net Income

-$74.00M

-6.4% Net Margin

EPS (Diluted)

$-0.10

Total Assets

$3.90B

Cash & Equivalents

$334.00M

Free Cash Flow

-$63.00M

Financial Statements
Beta
Revenue$1.16B
Cost of Revenue$702.00M
Gross Profit$459.00M
R&D Expenses$308.00M
SG&A Expenses$171.00M
Operating Income-$29.00M
Interest Expense$42.00M
Net Income-$74.00M
EPS (Basic)$-0.10
EPS (Diluted)$-0.10
Shares Outstanding (Basic)752.00M
Shares Outstanding (Diluted)752.00M

Key Highlights

  • 1Net revenue for Q2 2013 was $1.16 billion, an 18% decrease year-over-year, reflecting challenging market conditions.
  • 2The company reported a net loss of $74 million for Q2 2013, compared to a net income of $37 million in Q2 2012.
  • 3For the six months ended June 29, 2013, net revenue decreased to $2.25 billion from $3.00 billion in the prior year.
  • 4The Computing Solutions segment's revenue declined by 20% year-over-year in Q2 2013, impacted by decreased unit shipments and average selling price.
  • 5The Graphics and Visual Solutions segment's revenue decreased by 13% year-over-year in Q2 2013, primarily due to lower GPU product revenue.
  • 6Operating expenses were reduced, with R&D and SG&A expenses showing year-over-year decreases as part of restructuring efforts.
  • 7Cash, cash equivalents, and marketable securities remained relatively stable at approximately $1.0 billion as of June 29, 2013.

Frequently Asked Questions

AMD reported a net revenue of $1.16 billion for the second quarter of 2013, an 18% decrease compared to $1.41 billion in the same quarter of 2012. The company incurred a net loss of $74 million for Q2 2013, contrasting with a net income of $37 million in Q2 2012.

The revenue decline was primarily attributed to challenging market conditions, particularly within the Computing Solutions segment, which experienced a 20% year-over-year decrease in revenue. This was driven by lower unit shipments and average selling prices for microprocessors and chipsets, reflecting reduced demand for PC products and increased competition.

Yes, AMD has been focused on reducing operating expenses. Research and Development (R&D) expenses decreased by 11% year-over-year in Q2 2013, and Marketing, General and Administrative (MG&A) expenses decreased by 19% year-over-year. These reductions are largely a result of the 2012 restructuring plan.

AMD's liquidity remains stable. As of June 29, 2013, the company reported cash, cash equivalents, and marketable securities totaling approximately $1.0 billion, which was consistent with the prior quarter. The company indicated it believes its cash balance and available external financing will be sufficient to fund operations over the next twelve months.