Summary
Advanced Micro Devices, Inc. (AMD) reported a net loss of $181 million for the second quarter ended June 27, 2015, a significant increase from a net loss of $36 million in the same period last year. Net revenue also declined substantially to $942 million, down 35% year-over-year, largely due to weak demand in the Computing and Graphics segment, influenced by OEMs working through existing inventory ahead of the Windows 10 launch. Despite a 13% sequential revenue increase in the Enterprise, Embedded and Semi-Custom segment, it was insufficient to offset the overall decline. The company is navigating challenging market conditions, particularly in the PC sector, and is focused on expense management and strategic transformation. AMD's liquidity remains a key focus, with cash and cash equivalents at $829 million. The company is actively engaged in discussions with GLOBALFOUNDRIES regarding its significant wafer purchase commitments for 2015, seeking to re-profile these obligations, which adds a layer of uncertainty to future financial commitments.
Financial Highlights
54 data points| Revenue | $942.00M |
| Cost of Revenue | $710.00M |
| Gross Profit | $232.00M |
| R&D Expenses | $235.00M |
| SG&A Expenses | $134.00M |
| Operating Income | -$137.00M |
| Interest Expense | $40.00M |
| Net Income | -$181.00M |
| EPS (Basic) | $-0.23 |
| EPS (Diluted) | $-0.23 |
| Shares Outstanding (Basic) | 778.00M |
| Shares Outstanding (Diluted) | 778.00M |
Key Highlights
- 1Significant year-over-year decline in net revenue: Revenue fell 35% to $942 million in Q2 2015 compared to $1,441 million in Q2 2014.
- 2Increased Net Loss: The company reported a net loss of $181 million for Q2 2015, a substantial increase from a $36 million net loss in the prior year's second quarter.
- 3Weakness in Computing and Graphics Segment: This segment saw a substantial revenue decrease of 54% year-over-year, attributed to lower demand from OEMs managing inventory related to the Windows 10 release.
- 4Resilience in Enterprise, Embedded and Semi-Custom Segment: This segment showed sequential revenue growth of 13% but experienced an 8% year-over-year decline.
- 5Reduced Gross Margin: Gross margin decreased to 25% from 35% in the prior year's second quarter, impacted by a less favorable product mix and a $33 million technology node transition charge.
- 6Continued Investment in R&D and SG&A: Research and Development expenses decreased 15% year-over-year, and Marketing, General & Administrative expenses decreased 13%, reflecting cost management efforts.
- 7Significant Wafer Purchase Commitments with GLOBALFOUNDRIES: AMD has approximately $1.1 billion in estimated purchase obligations for fiscal 2015 with GF and is in discussions to re-profile these commitments.