Advanced Micro Devices, Inc. Misses Estimates, Cuts Jobs

Advanced Micro Devices, Inc. Misses Estimates, Cuts Jobs
By Advanced Micro Devices, Inc. ( [Public domain], via Wikimedia Commons

Advanced Micro Devices, Inc. (NYSE:AMD) released the results from its most recently completed quarter after closing bell tonight, posting non-GAAP earnings of 3 cents per share on $1.43 billion in revenue. Analysts had been expecting the semiconductor maker to post earnings of 4 cents per share on $1.47 billion in revenue. In the same quarter a year ago, AMD posted earnings per share of 6 cents and revenue of $1.46 billion.

Advanced Micro Devices’s key earnings metrics

AMD’s gross margin was 35% for the quarter, while operating income was $63 million. Non-GAAP operating income was $66 million. Net income was $17 million or 2 cents per share. The company had $938 million in cash, cash equivalents and marketable securities at the end of the quarter. Total debt was $2.2 billion.

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“Our Enterprise, Embedded and Semi-Custom segment results were strong; however, performance in our Computing and Graphics segment was mixed based on challenging market conditions that require us to take further steps to evolve and strengthen the financial performance of this business,” said AMD President and CEO Dr. Lisa Su in a statement. “Our top priority is to deliver leadership technologies and products as we continue to transform AMD.”

AMD earnings results by segment

Advanced Micro Devices said its Computing and Graphics segment saw a 6% sequential decline and 16% year over year decline in revenue. The company said lower GPU and chipset sales drove the sequential decline, while lower notebook processor and chipset sales drove the year over year decline. Operating loss for the segment was $17 million.

Revenue from AMD’s Enterprise, Embedded and Semi-Custom segment rose 6% sequentially and 21% year over year due to higher sales of semi-custom system on a chip. Operating income was $108 million.

AMD announces job cuts

Advanced Micro Devices also revealed plans to slash its global workforce by 7%. The job cuts are part of the company’s new restructuring plan. Most of the restructuring plan, including all those job cuts will be implemented in the current quarter.

AMD will take charges of about $57 million in the current quarter and about $13 million in the first half of next year in connection with the restructuring efforts. The company expects to see about $9 million in operational savings in the current quarter and $85 million next year.

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