SAN FRANCISCO—Advanced Micro Devices Inc. (AMD) Thursday (April 19) reported that first quarter sales declined on both a sequential and annual basis and said it expects its second quarter revenue to be flat to slightly higher.
AMD (Sunnyvale, Calif.) reported first quarter sales of $1.59 billion, down 6 percent from the previous quarter and down 2 percent compared to the first quarter of 2011. The firm reported a net loss in accordance with generally accepted accounting principles (GAAP) of $590 million, or 80 cents per share, compared to a GAAP net loss of $177 million in the previous quarter and a GAAP net income of $510 million in the year-ago quarter.
On a non-GAAP basis, excluding charges and special items, AMD reported a net income of $92 million, or 12 cents per share, down from $138 million or 19 cents per share in the previous quarter but down from a non-GAAP net income but up from $56 million or 8 cents per share in the year-ago quarter. Non-GAAP earnings per share came in above the mean of consensus analysts' estimates, according to Marketwatch.
AMD said the first quarter loss was partially due to the previously disclosed charge of $703 million for waiving Globalfoundries Inc.'s exclusive right to manufacture some of AMD's 28-nm accelerated processing units (APUs). AMD had also paid out $281 million in cash for the purchase of microserver maker SeaMicro, leaving $1.71 billion cash in the bank at the end of the first quarter.
Despite the losses, Rory Read, AMD president and CEO, characterized Q1 as a "solid quarter" for AMD and said the firm remained singularly focused on improving execution.
Gross margins remained flat sequentially, said AMD, while the firm's computing segment decreased eight percent sequentially and was flat year-over-year due to slackening demand in the PC space.
The price of AMD's microprocessors also decreased in Q1, while remaining flat year-over-year. Graphics too, continued into a slow decline, with the segment revenue flat sequentially but down seven percent year-over-year due to lower demand for desktop and mobile graphics.
That said, AMD noted its GPU revenue was up in a seasonally down quarter, due to higher improved desktop GPU ASP in the channel, offset by seasonally lower game console royalty revenue.
The firm was also bullish on its follow-on Brazos platform, "Brazos 2.0," as well as its second generation A-Series APU, codenamed "Trinity," which AMD believes will position it very well in the thin-and-light notebook space. "We're going to bring ultra-thin to the mainstream at mainstream price points," said Reed.
Reed also told press and analysts that AMD was keeping a close eye on the issues surrounding 28-nm ramping, noting, "28-nm is a very important part of our business." He said AMD was currently the only company offering a top-to-bottom family of 28-nm discrete desktop GPUs and that he believed the firm could continue to deliver its base plan to customers. "We have the execution and plans in place," he said.
Talking about the amended wafer supply agreement with Globalfoundries, Reed said the new wafer pricing based on a take or pay arrangement was "win-win" and said he was "excited" about the opportunities ahead.
For the second quarter, AMD said it expects sales to be between $1.59 billion and $1.69 billion, flat to up 6 percent compared to the first quarter.