AMD limps through Q4, and 2013 doesn't look much better
AMD tumbles to the end of the 2012 fiscal year with yet another poor result for its fourth quarter.
Chipmaker AMD suffered yet another brutal knock to its financials as it came crashing to the end of the 2012 fiscal year with yet another poor quarter.
The chipmaker reported a fourth quarter net loss of $473 million, or 63 cents a share, on revenue of $1.16 billion, down by 32 percent from a year ago. Non-GAAP earnings were 14 cents a share.
Wall Street expected AMD to report a fourth quarter loss of 20 cents a share on revenue on $1.15 billion.
For the year ending December 29, AMD reported a net loss of $1.18 billion on revenue of $5.42 billion. Full-year non-GAAP earnings per share stood at 16 cents.
The chipmaker has now posted negative cash flows for three consecutive quarters amid declining revenues, and the company's fiscal fourth quarter just put the nail in the coffin to the rough year that it suffered as a result of declining PC sales.
AMD chief executive Rory Read noted in prepared remarks that the company continues to "evolve our operating model and diversify our product portfolio with the changing PC environment," adding:
Innovation is the core of our long-term growth. The investments we are making in technology today are focused on leveraging our distinctive IP to drive growth in ultra low power client devices, semi-custom SoCs and dense servers. We expect to deliver differentiated and groundbreaking APUs to our customers in 2013 and remain focused on transforming our operating model to the business realities of today
Standard & Poor only two weeks ago cut AMD's credit rating to reflect the company's "vulnerable" business risk profile, and warned that the chipmaker's earnings and revenue may decline even further.
AMD said late last year that it was not up for sale, nor would it call in the bankers to evaluate its sale options, despite its poor third quarter results and the subsequent cuting around 15 percent of its workforce. Further layoffs are expected this month, according to earlier reports.
Other bits you need to know:
- Gross margin was 15 percent for the fourth quarter. On a non-GAAP basis, AMD's gross margin was 39 percent, an increase of 8 percent;
- AMD's cash balance stood at $1.2 billion at the end of the fourth quarter;
- Restructuring costs and operational efficiencies in the fourth quarter resulted in a $90 million charge, which includes expected costs in 2013's fiscal first quarter;
- GPU revenue decreased quarter-on-quarter and year-over-year due to lower unit volume shipments. Operating income was $22 million, compared to $18 million in the third quarter and $27 million in the same quarter a year ago.
AMD closed down 0.4 percent at market close at $2.45 a share, and gained modestly in after-hours trading by 3.3 percent to $2.53 a share. The chipmaker is down by more than 70 percent from its March 2012 peak of $8.20 a share.
AMD's outlook for the upcoming 2013 fiscal first quarter is bleak. AMD expects revenue to decrease by a further 9 percent, give or take 3 percent.
This item first appeared on ZDNet under the headline "AMD suffers Q4 loss: A rough end to a rough year."