AMD loses $1.77 billion in December quarter
AMD on Thursday reported a fourth quarter net loss that equaled its revenue total.
AMD reported a net loss of $1.77 billion, or $3.06 a share, on revenue of $1.77 billion. Revenue was up 8 percent from the third quarter and was flat from a year ago. The loss includes charges of $1.67 billion, or $2.89 a share, which were mostly operating.
While the loss is staggering it's not the complete train wreck it appears. AMD took a $1.61 billion charge for the impairment of goodwill related to the ATI acquisition. AMD's impairment charge equates to a confession that the ATI purchase didn't deliver the results it was supposed to.
Once you exclude all the charges--and there are a lot of them--AMD had a non-GAAP net loss of $97 million. AMD came out with a non-GAAP operating income loss of $9 million. But that $9 million carries the following footnote:
In this press release, in addition to GAAP financial results, AMD has provided non-GAAP financial measures for operating income (loss) and net income (loss) to reflect its financial results without charges for the ATI impairment of goodwill and acquired intangible assets, ATI other acquisition-related charges, and severance charges for operating income (loss) and in addition, without the tax benefit from ATI acquisition-related charges, investment impairment charges and debt-related net charges for net income (loss).
If you back out AMD's various items you come up with a fourth quarter loss of 17 cents a share. According to Thomson Financial AMD was expected to report a loss of 36 cents a share on sales of $1.78 billion. Given the afterhours stock reaction Wall Street isn't entirely bent out of shape over the results, but isn't exactly chipper either. Optimists can argue that AMD beat estimates--if you exclude more than a billion dollars of charges.
In a statement, AMD CFO Robert Rivet said the following:
“We were close to break-even operationally for the quarter, reducing our fourth quarter non-GAAP operating loss to $9 million. We improved gross margin by three points sequentially, driven by increased shipments of new products, higher average selling prices and cost containment actions. We shipped a record number of microprocessor units in the quarter, including nearly four hundred thousand quad-core processors.”
As for the outlook, AMD expects "revenue to decrease in line with seasonality."