AMD's 2015 results highlight continued financial troubles
January 20, 2016 // 11:10 a.m.
AMD has reported its last-quarter earnings for its 2015 financial year, and they'll make tough reading for anyone hoping that the company's financial troubles may be easing.
The company's quarterly results showed a 10 per cent sequential and 23 per cent year-on-year decline in revenue, dropping to $958 million for the quarter thanks to a seasonal dip in semi-custom chip sales and the impact of the continuing slump in the traditional PC market. The result: an operating loss of $49 million for the quarter, an improvement on the quarter prior which had a $65 million inventory write-down charge attached, with a welcome up-tick in profit margin of seven percentage points to a still-poor 30 per cent.
Combined with the last three quarters for a full-year view, AMD's troubles are placed in sharp focus: revenue of $3.99 billion is down 28 per cent year-on-year while poor profit margins throughout 2015 led to a year-end total of just 27 per cent, down six points year-on-year. All told, those figures have led to an operating loss of $481 million for the year - a massive increase over the $155 million loss the company made for its 2014 financial year.
Despite this, the company is still trying to paint a rosy picture of its future. 'AMD closed 2015 with solid execution fuelled by the second straight quarter of double-digit percentage revenue growth in our Computing and Graphics segment and record annual semi-custom unit shipments,' crowed AMD president and chief executive Lisu Su of the results. 'While 2015 was challenging from a financial perspective, key R&D investments and a sharpened focus on innovation position us well to deliver great products, improved financial results and share gains in 2016.'
During the earnings call, Su revealed that the first processors based around the new Zen architecture - which the company hopes will reverse its fortunes before it runs out of cash completely - will be hit the enthusiast market by the end of the year, with server-centric parts due early 2017. It's no exaggeration to say that the company's future rests on the success of Zen and the upcoming Polaris graphics core family.