AMD Revenue Tumbles, but Loss Narrows
January 19 2016 - 6:10PM
Dow Jones News
Advanced Micro Devices Inc. said revenue fell 23% in the fourth
quarter, amid lower sales of processors used in personal computers
and a decline in game console royalties, though the chip maker's
quarterly loss narrowed.
Meanwhile, the price of the company's shares fell 6.2% to $1.83
in recent after-hours trading, as AMD's sales forecast for the
current quarter was mostly below analysts' expectations.
For the quarter ending in March, the company forecast a revenue
decline of 14%, "plus or minus 3%," from the December quarter.
Analysts polled by Thomson Reuters had expected revenue to fall 13%
to $899 million.
For the three-month period ended Dec. 26, AMD reported revenue
of $958 million, down from $1.24 billion a year earlier. Analysts
had expected revenue of $955 million.
In the computing and graphics segment, which includes chips for
personal computers, revenue fell 29% to $470 million. Average
selling prices declined, mostly owing to weaker prices for
processors used in notebook computers.
AMD's business that includes technology for game consoles—along
with server and embedded processors and semi-custom
products—reported revenue decreased 15% to $488 million, mostly
driven by lower game console royalties and weaker revenue for
server and embedded processors.
Overall, AMD posted a loss of $102 million, or 13 cents a share,
compared with a year-earlier loss of $364 million, or 47 cents a
share. Excluding stock-based compensation and other items, the
per-share loss was 10 cents, compared with adjusted earnings of two
cents a year earlier.
Gross margin widened to 30% from 29%, as lower costs offset the
decline in sales. Overhead costs fell 3.5%, while
research-and-development expenses dropped 24%.
AMD, based in Sunnyvale, Calif., is for a long time trailed
market leader Intel Corp. in selling microprocessors for PCs. Like
other chip makers, AMD has been hurt by weaker demand for personal
computers. Though AMD has taken steps to diversify its business,
but other markets including chips for videogame consoles from Sony
Corp. and Microsoft Corp. have weakened.
AMD also has continued efforts to cut costs, including a joint
venture unveiled in October with a Chinese company that will
provide a $371 million cash infusion and is expected to reduce
AMD's spending in the future.
AMD several years ago sold off the operations that manufacture
its chips. But it retained facilities in China and Malaysia that
package and test products it designs. Under the joint venture pact,
Nantong Fujitsu Microelectronics will acquire an 85% stake in those
operations and AMD will retain the remainder.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
January 19, 2016 17:55 ET (22:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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