Industry execs are paid to put on a brave face when outlining company financials, and AMD’s CEO Lisa Su kept up her end of the bargain last night when the broken business reported a net loss of $497m for 2016.
This was progress of sorts: in the prior year ailing AMD filed losses of $660m. Despite the latest numbers, the stock market price barely moved, such were Wall Street’s expectations.
Su, who is paid $950,000 a year with an equity award target valued at $7m, spelt out the positives in the year. She pointed to “growing discrete graphics share”; “regaining client compute share”; and “strengthening the financial foundation of the company by achieving annual non-GAAP operating profitability, reducing debt and increasing cash”. Long term debt fell to $1.44bn versus $2.23bn, she added.
All of that was true, and work to boost the technical, operational and fiscal footing over the past couple of years will feed into the numbers very soon, the exec assured analysts on a conference call.
“We entered 2017 with strong revenue growth and margin expansion opportunities as we prepare to launch our Zen-based CPUs and Vega GPUs that can return AMD to the high performance markets, where we have not materially participated in recent years. The production ramp, customer adoption and ecosystem support for our Zen-based desktop processor, Ryzen, are all mapping to our plans.”
Ryzen is due to launch in early March; system builders in the channel and integrators will get shipments earlier than “more traditional hardware vendors” who will get it “later”. This is the CPU AMD will position against nemesis Intel’s Core i5 and i7 units. The next two versions, Zen 2 and 3, are being developed under 7nm manufacturing.
AMD ended the year on a relative high as revenue claimed 15 per cent year on year to $1.11bn. Divisional revenues in Computing and Graphics were up 28 per cent to $600m fuelled by a sales uplift in GPU and PC processors, the highest in 11 and seven quarters respectively.
The Enterprise, Embedded and Semi-Custom unit sold $506m worth of components, up 4 per cent. Demand for AMD-powered consoles from Microsoft and Sony helped out and embedded processor sales were up double digits.
The total operating loss for Q4 was $3m compared to $49m and the net loss was $51m, half of the loss reported a year ago.
For the year, revenues grew to $4.27bn from $3.99bn, operating losses came in at $372m compared to $481m, and net loss fell to $497m from $660m.
AMD said the 2016 “operating loss improvement was due to higher revenues, lower restructuring charges (related to lay-offs) and an IP monetisation gain, offset by the WSA charge”.
A five-year amendment to its Wafer Supply Agreement with Global Foundries saw AMD stump up $340m to the chip fab giant.
Turnover for the current 13-week quarter is an 11 per cent sequential decrease in turnover. ®