AMD revenue falls as financial struggles continue

The chip maker has been struggling with a slow PC market and is trying to diversify into tablets and ARM-based servers

Advanced Micro Devices' financial struggles continued in the fourth quarter, with revenue sinking 32 percent due to slow chip sales and charges tied to restructuring and inventory adjustments.

AMD reported revenue of US$1.16 billion for the quarter, down from $1.69 billion a year earlier. Analysts had been expecting revenue of $1.15 billion, according to a consensus estimate compiled by Thomson Reuters.

Its net loss was $473 million, wider than the loss of $177 million it reported for the same quarter a year earlier. The latest figure includes a charge of $209 million for reducing its purchasing obligations to GlobalFoundries, which manufactures AMD's chips, and an additional $90 million in charges related to a restructuring.

AMD's financial woes are tied to the slowdown in the PC industry, which declined last year for the first time in more than a decade. In December, AMD cut its chip orders from GlobalFoundries because of the weak sales environment.

Also last quarter, AMD said it will lay off 15 percent of its worldwide staff in an effort to cut costs and return to profitability.

The PC slowdown has also affected Intel, which reported last week that sales from its PC client business in the most recent quarter fell by 3 percent.

AMD is trying to reduce its dependence on PCs by diversifying in the tablet market and into new server markets. Earlier this year it showed off a tablet based on an upcoming chip called Temash, which will be available in products in the first half this year. It's also trying to expand beyond the x86 server business, and is expected to sell ARM-based server chips starting in 2014.

AMD is changing its product portfolio to adapt to the changing market, CEO Rory Read said in a statement Tuesday. The company will deliver new chips and products this year to expand its product line, he said.

Sales in AMD's Computing Solutions division, which deals in chips for PCs, servers and tablets, were $829 million during the quarter just ended, down 32 percent compared to the previous year's fourth quarter.

Demand also fell for AMD's graphics cards, leading to a 15 percent year-on-year revenue decline for its graphics unit.

On a pro forma basis, excluding one-time charges and other items, AMD would have reported a net loss of $102 million for the quarter, or $0.14 a share. Analysts had been expecting a loss of $0.20 per share.

For the first quarter that just got under way, AMD expects to report a sequential decline in revenue of 9 percent, plus or minus 3 percent, it said.

Agam Shah covers PCs, tablets, servers, chips and semiconductors for IDG News Service. Follow Agam on Twitter at @agamsh. Agam's e-mail address is agam_shah@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags business issuesfinancial resultsAdvanced Micro Devices

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Agam Shah

IDG News Service
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?