April 19, 2012 at 17:14 PM EDT
AMD Rising: Q1 Beats; Q2 Rev View Beats
Shares of chip maker Advanced Micro Devices ( AMD ) are up 17 cents, or 2%, at $8.14 in late trading after the company reported Q1 revenue of $1.59 billion, and EPS of 12 cents a share, excluding some costs, trumping the consensus $1.56 billion and 9 cents. Revenue was down 1%, year over year, and down 6% from Q4's level, but adjusted profit per share was 50% higher than the prior-year period. On a GAAP basis, the company lost $590 million as a result of previously disclosed $703 million charge in return for a a limited "waiver of exclusivity" with foundry partner GlobalFoundries. The company's adjusted gross margin improved one point, to 46% from 45% a year earlier, and the same as Q4's level. AMD's "Computing Solutions" segment saw revenue decline 8% from the prior quarter, while revenue for its graphics chips was flat with Q4's result. The company said its sales were hit by shipments of desktop computers using microprocessors with 45-nanometer features. Although shipments of server processors rose, average selling prices declined, the company said. Further details on the quarter are available in the commentary document from AMD's CFO, Thomas Seifert . CEO Rory Read remarked that the results were "strong" and said the company looked forward to "a complete top-to-bottom introduction of new APU [application processing unit] offerings , combined with ample product supply resulting from continued progress with our manufacturing partners." The company's conference call with analysts begins at 5 pm, Eastern time, and you can catch the webcast of it here. Update: During the call, the company forecast Q2's revenue to be flat to up 6%, which would be better than the average estimate for revenue to be flat at $1.59 billion. Update 2: Pat Moorhead, head of consulting firm Moor Insights & Strategy, and a former AMD executive tells me that it was a "pretty good quarter," in terms of client shipments, graphics shipments, server processor seeing "small improvements." "I think it gets pretty interesting in the next couple quarters as they have a whole portfolio refresh, especially with 'Trinity," the company's follow-on to its "Llano" processor for notebooks.

Shares of chip maker Advanced Micro Devices (AMD) are up 17 cents, or 2%, at $8.14 in late trading after the company reported Q1 revenue of $1.59 billion, and EPS of 12 cents a share, excluding some costs, trumping the consensus $1.56 billion and 9 cents.

Revenue was down 1%, year over year, and down 6% from Q4′s level, but adjusted profit per share was 50% higher than the prior-year period.

On a GAAP basis, the company lost $590 million as a result of previously disclosed $703 million charge in return for a a limited “waiver of exclusivity” with foundry partner GlobalFoundries.

The company’s adjusted gross margin improved one point, to 46% from 45% a year earlier, and the same as Q4′s level.

AMD’s “Computing Solutions” segment saw revenue decline 8% from the prior quarter, while revenue for its graphics chips was flat with Q4′s result.

The company said its sales were hit by shipments of desktop computers using microprocessors with 45-nanometer features.

Although shipments of server processors rose, average selling prices declined, the company said.

Further details on the quarter are available in the commentary document from AMD’s CFO, Thomas Seifert.

CEO Rory Read remarked that the results were “strong” and said the company looked forward to “a complete top-to-bottom introduction of new APU [application processing unit] offerings, combined with ample product supply resulting from continued progress with our manufacturing partners.”

The company’s conference call with analysts begins at 5 pm, Eastern time, and you can catch the webcast of it here.

Update: During the call, the company forecast Q2′s revenue to be flat to up 6%, which would be better than the average estimate for revenue to be flat at $1.59 billion.

Update 2: Pat Moorhead, head of consulting firm Moor Insights & Strategy, and a former AMD executive, tells me in a phone call this evening that it was a “pretty good quarter,” in terms of client shipments, graphics shipments, and in terms of the server processor business, which saw “small improvements.”

“I think it gets pretty interesting in the next couple quarters as they have a whole portfolio refresh, especially with ‘Trinity‘,” the company’s follow-on to its “Llano” processor for notebooks.

“I think Trinity will be very competitive on the graphics side and on battery life,” says Moorhead. Llano suffered from not being shipped on time and in volume to be able to satisfy customers, he notes, problems that should be solved with the improved outlook at GlobalFoundries.

The updated core in Trinity, and the 10% to 15% performance improvement it brings, moreover, may help the company turn around AMD’s competitiveness in desktop processors as well.

The company is near a decade low in terms of server processor shipments, at about 5%, down from 30% or so in 2006, notes Moorhead, but “clearly they are looking to the future” with the advent of “micro-servers” and the acquisition of SeaMicro.

Moorhead sees the company able to regain some market share this year thanks to its re-commitment to the server market. Read’s background at IBM have garnered him a lot of goodwill in the enterprise server market.

Moorhead thinks AMD will be most competitive in “convertible” classes of mobile devices, which combine the functions of a laptop with tablet capabilities.

Moorhead notes, however, that in 2013, the company will have a new chip specifically designed for tablets, called “Tamesh.”

“It will get them into a new space that in 2013 will be pretty big,” he says. “This is where you’re going to see a big spike in volume [in tablets] because of Windows 8.”

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