Summary
Advanced Micro Devices, Inc. (AMD) filed its 10-Q for the period ending September 23, 2016, reporting a net revenue of $1.31 billion for the third quarter, a significant increase of 23% year-over-year. Despite the revenue growth, the company reported a net loss of $406 million for the quarter. This loss was largely attributed to a significant charge of $340 million related to the Sixth Amendment of the Wafer Supply Agreement with GLOBALFOUNDRIES Inc. (GF) and the issuance of warrants. The company also successfully raised substantial capital through the issuance of common stock ($668 million) and convertible senior notes ($700 million), which were largely used to reduce its debt. The Enterprise, Embedded and Semi-Custom segment showed strong performance, while the Computing and Graphics segment saw modest revenue growth. Financially, AMD ended the quarter with a stronger cash position of $1.26 billion, up from $785 million at the end of the prior year. Debt was reduced, with significant repurchases of senior notes. The company's strategic initiatives, including the formation of joint ventures and amendments to supply agreements, are aimed at enhancing flexibility and market expansion, particularly in China. Investors should note the significant one-time charge impacting profitability this quarter, while recognizing the positive steps taken to strengthen the balance sheet and secure future operational flexibility.
Financial Highlights
53 data points| Revenue | $1.31B |
| Cost of Revenue | $1.25B |
| Gross Profit | $59.00M |
| R&D Expenses | $259.00M |
| SG&A Expenses | $117.00M |
| Operating Income | -$293.00M |
| Interest Expense | $41.00M |
| Net Income | -$406.00M |
| EPS (Basic) | $-0.50 |
| EPS (Diluted) | $-0.50 |
| Shares Outstanding (Basic) | 815.00M |
| Shares Outstanding (Diluted) | 815.00M |
Key Highlights
- 1Third-quarter revenue increased 23% year-over-year to $1.31 billion, driven by the Enterprise, Embedded and Semi-Custom segment (+31%) and Computing and Graphics segment (+11%).
- 2Net loss for the quarter was $406 million, significantly impacted by a $340 million charge related to the Sixth Amendment to the Wafer Supply Agreement and warrant issuance.
- 3The company successfully raised approximately $1.35 billion in new capital through the issuance of common stock ($668 million) and convertible senior notes ($700 million).
- 4Cash and cash equivalents increased to $1.26 billion as of September 24, 2016, up from $785 million at the end of 2015, indicating improved liquidity.
- 5Long-term debt decreased significantly to $1.63 billion from $2.01 billion due to substantial debt repurchases during the quarter.
- 6Entered into a Sixth Amendment to the Wafer Supply Agreement with GLOBALFOUNDRIES, granting more sourcing flexibility in exchange for future payments and a warrant issued to a Mubadala affiliate.
- 7Completed the sale of a majority equity interest in ATMP facilities, forming joint ventures and generating approximately $346 million in net cash proceeds.