AMD takes a $403 million loss for 2014

January 22, 2015 // 9:18 a.m.

Tags: #amd #apu #carrizo #cpu #financial #fy2014 #goodwill-impairment #inventory #lisa-su #opteron #playstation-4 #ps4 #radeon #semiconductor #xbox-one

AMD has reported a $403 million loss for its latest financial year, despite the impressive success of its semi-custom semiconductor division, blaming an unspecified 'goodwill impairment charge' and a dip in mainstream revenue source.

In AMD's final earnings call of its 2014 financial year, the company reported a whopping $364 million net loss on $1.24 billion in revenue for the quarter, wiping out the profits it had eked out earlier in the year. The result: a $403 million loss for the year, despite an increase in overall revenue of four per cent year-on-year to $5.51 billion.

'We made progress diversifying our business, ramping design wins and improving our balance sheet this past year despite challenges in our PC business,' claimed Dr. Lisa Su, AMD's incoming president and chief executive, during the call. 'Annual Enterprise, Embedded and Semi-Custom segment revenue increased over 50 per cent as customer demand for products powered by our high-performance compute and rich visualization solutions was strong. We continue to address channel headwinds in the Computing and Graphics segment and are taking steps to return it to a healthy trajectory beginning in the second quarter of 2015.'

While AMD's revenue from its semi-custom design wins in Sony and Microsoft's respective games consoles slid in the quarter by 11 per cent, overall for the year it showed healthy growth at 51 per cent year-on-year. It's the company's mainstream bread and butter that has taken the biggest pounding: its figures suggest that revenue from the Computing and Graphics division responsible for mainstream and laptop processors, APUs and graphics chips was down 15 per cent quarter-on-quarter and 16 per cent year-on-year. This, AMD claims, was due to 'lower desktop processors and GPU sales.'

The losses are only partly explained by the decreased revenue. The bulk of the company's poor performance is being blamed on a $233 million unspecified 'goodwill impairment charge,' while a further $71 million has been spent so far in service of Su's restructuring exercise. Another $58 million was burned on inventory adjustment, largely due to excess stock of the company's second-generation APU products.

AMD is eager to convince investors that it is on-track for the future. Its highlights for the coming financial year include continued strong sales for AMD-powered games consoles, uptake of its Carrizo family APUs, and increased interest in AMD APU products for the embedded market thanks to the launch of the Gizmo 2 development board. The company also trumpeted the launch of openSUSE Linux 13.2, the first to offer direct support for the company's ARM-architecture Opteron processor, and its hopes for FreeSync's success.

Things will get worse before they get better, though: AMD finished its report with the warning that for the first quarter of its 2015 financial year, it expects revenue to decrease a further 15 per cent sequentially.
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