14 DAY TRIAL // Like so many other companies, Advanced Micro Devices reported its financial results for 2014 and the fourth quarter of 2014 in particular. Sadly, the company did not have the best tidings to impart.
Advanced Micro Devices managed to make a profit in the second and third quarters of 2014, showing that its business had started to pick up between April and August.
Unfortunately, two did not become three, so no recovery trend was established. Instead, AMD finished 2014 with a rather severe drop in income.
Considering that the fourth quarter offers the winter holidays as a vehicle for improved sales all over the consumer market, this is not at all encouraging. Unfortunately, bad as it is this is the situation.
AMD incurs a net loss of over $369 million / €364 million
The computing and graphics segments showed a rather significant drop in revenue, of around 16% compared to 2013 and 15% compared to the third quarter of 2014 itself.
Lower desktop processor and GPU sales were mainly responsible for this, as were reduced chipset shipments.
Thus, even though AMD has been supplying the processors for the PlayStation 4 and Xbox One game consoles, the finances ultimately ended in the red.
The operating loss was of $330 million / €283 million, while the net loss was of $364 million / €313 million. Full revenue for Q4 was $1.24 billion / €1.07 billion.
For comparison, Q4 2014 ended with revenue of $1.59 billion / €1.37 billion and there was no loss. Instead, the profit was of $89 million / €76.58 million.
All this led to the entire year 2014 ending with an operating loss, of $155 million / €133 million and a gross margin decrease of 33%. Revenue was of $5.51 billion / €4.74 billion.
In the end, the only part of the company business that experienced a growth, other than the game console field, was that of Enterprise, Embedded and Semi-Custom systems.
Expectations for the next quarter
AMD expects a further drop of 12-18% in revenue, which makes sense for two reasons. One is that Q1 is a slow season every year. The second is that AMD has recently revealed that it won't be launching anything new until April.