AMD Loss Widens As Restructuring Bites

Advanced Micro Devices has missed Wall Street expectations for its latest financial results in the face of ongoing challenges in the PC industry.

The results come just days after it was revealed that three more executives were leaving, including including John Byrne, who was in charge of the company’s compute and graphics unit.

Red Ink

AMD’s latest financials reveal a lot of red ink as it struggles with poor sales of graphics cards and the competition from bitter rival Intel in a tough PC market. Indeed, whilst AMD managed to grow its full year sales, there was no hiding a larger annual loss.

For the fourth quarter AMD slide into a net loss of $364m (£241m) compared to a profit of $89m (£59m) in the same year-ago quarter. There was equally bad news on the sales side, as revenues slide 22 percent to $1.24bn (£820m) compared to $1.59bn (£1.05bn) a year early.

The news did no improve much when the full year figures were examined. For the full year AMD posted a larger net loss of $403m (£267m), compared to a net loss of $83m (£55m) in the previous year. Annual revenues did however manage to grow 4 percent to $5.51bn (£3.6bn) compared to $5.30bn (£3.5bn).

“We made progress diversifying our business, ramping design wins and improving our balance sheet this past year despite challenges in our PC business,” said Dr. Lisa Su, AMD president and CEO.

“Annual Enterprise, Embedded and Semi-Custom segment revenue increased over 50 percent as customer demand for products powered by our high-performance compute and rich visualization solutions was strong,” said Dr. Su. “We continue to address channel headwinds in the Computing and Graphics segment and are taking steps to return it to a healthy trajectory beginning in the second quarter of 2015.”

Torrid Time

To be fair to AMD, the company is feeling the effect of financial charges as it seeks to restructure itself. But in truth AMD has had a torrid few years.

Last October its CEO Rory Read was replaced suddenly, in a move that seemed to have caught many by surprise. It naturally prompted questions over whether Read jumped voluntarily or was pushed out. It is worth remembering that AMD has previous form here, as Read’s predecessor (Dirk Meyer) was forced to resign in early 2011.

Read was replaced by Dr Su, who a week later announced another painful restructuring, with seven percent (700 people) of staff to lose their jobs. This was on top of previous job losses and restructuring.

There are now fears that the latest results could mean even more painful cuts and further restructuring going forward.

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