AMD meets Q1 earnings targets amid datacenter-driven cost cutting plan

AMD meets Q1 earnings targets amid datacenter-driven cost cutting plan

Summary: AMD has been making strides to cut down on costs, investing now in a datacenter consolidation with the objectives to be more nimble, effective, and dish out products faster.

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AMD reported first quarter earnings after the bell on Thursday.

The semiconductor maker reported a net loss of $20 million, or three cents per share (statement).

Non-GAAP earnings were two cents per share on a revenue of $1.40 billion, down 12 percent sequentially but up 28 percent year-over-year.

Wall Street was expecting AMD's earnings to flatten out at zero cents a pop on a revenue of $1.34 billion.

Here's a closer look at how AMD performed during the first quarter, by department:

  • Computing Solutions revenue: Down eight percent sequentially and 12 percent year-over-year. In what is likely another stab at the flailing PC industry, AMD attributed this decrease to "decreased client unit shipments."
  • Microprocessor average selling price: Flat sequentially and decreased "slightly" annually.
  • Graphics and Visual Solutions revenue: Proving to be the bright spot on the Q1 balance sheet, revenue shot up 118 percent year-over-year, albeit decreased 15 percent sequentially. AMD touted semi-custom SoCs as the primary kickstarter here. GPU revenue also shot up both sequentially and year-over-year thanks to "strong demand for the AMD Radeon R7 and R9 family of products."

Focusing on the year overall, CEO Rory Read highlighted the graphics card portfolio in prepared remarks:

AMD continued our momentum by building on the solid foundation we set in the second half of 2013, further transforming the company. Backed by our powerful x86 processor cores and hands-down best graphics experiences, we achieved 28 percent revenue growth from the year-ago quarter. We are well positioned to continue to grow profitably as we diversify our business and enable our customers to drive change and win.

AMD has been making strides to cut down on costs, investing now in a datacenter consolidation with the objectives to be more nimble, effective, and dish out products faster.

During a tour of its Atlanta facility last month, AMD CIO Jake Dominguez described to ZDNet's Zack Whittaker how the Austin to Atlanta datacenter consolidation -- a major effort to reinvent AMD's internal IT strategy -- helped the company save $8.5 million 2013 alone.

"Our IT system is one of the few organizations that touches every process in the company," Dominguez said during a phone interview with ZDNet in March. "We were running about 200 projects from an IT portfolio perspective, and we were executing them on-time about 50 percent of the time, which is a really poor scorecard. It reflected the sequence underneath a lot of the complexities that we were building into the system. We had a mentality, if you started a project you would order new infrastructure."

For the current quarter, Wall Street maintained the earnings forecast of zero cents per share while expecting revenue to climb to $1.36 million. For guidance, AMD followed up with a projection that Q2 revenue will increase by three percent, plus or minus three percent, sequentially.

Topics: Hardware, Processors, Enterprise 2.0, PCs, Tech Industry

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