Advanced Micro Devices released its latest earnings report after closing bell tonight, posting non-GAAP earnings of 3 cents per share on $1.31 billion in revenue. Analysts had been expecting the chip maker to break even on $1.21 billion in revenue for the third quarter. In last year’s third quarter, AMD reported $1.06 billion in revenue and non-GAAP losses of 17 cents per share.
AMD’s losses widen
AMD’s third quarter net loss widened significantly to 50 cents per share from the 25 cents per share it lost in last year’s third quarter. The company’s operating losses widened from $158 million last year to $293 million this year.
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The chip maker saw record semi-custom system-on-a-chip orders in the third quarter and increases in GPU and mobile APU sales, although lower client desktop processor and chipset sales partially offset those increases. AMD’s GAAP gross margin plunged from 31% in the second quarter to 5% in the third quarter. The company said the contraction was due to a $340 million charge related to the sixth amendment to its wafer supply agreement with GlobalFoundries. The non-GAAP gross margin remained at 31%
Advanced Micro Devices said revenue for its Computing and Graphics segment rose 11% year over year to $472 million. Enterprise, Embedded and Semi-Custom revenue rose 31% year over year to $835 million. The operating losses came in the Other category and amounted to $363 million, compared to operating losses of $61 million for the segment in the same quarter last year.
“Our third quarter financial results highlight the progress we are making across our business,” AMD President and Chief Executive Lisa Su said in a statement. “We now expect to deliver higher 2016 annual revenue based on stronger demand for AMD semi-custom solutions and Polaris GPUs. This positions us well to accelerate our growth in 2017 as we introduce new high-performance computing and graphics products.”
AMD guides for sequential revenue decline
Advanced Micro Devices expects revenue for the fourth quarter to tumble 18% quarter over quarter, plus or minus 3 percentage points. At the midpoint of that outlook, AMD’s revenue would rise by about 12% compared to last year’s fourth quarter. The chip maker expects full-year revenue to increase 6% year over year.
Shares of AMD tumbled by as much as 5.17% to $6.60 in after-hours trades after closing regular trading hours up 2.81% at $6.96