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Advanced Micro Devices on Thursday revealed financial results for the third quarter of fiscal 2013. The company’s core businesses – microprocessor business and graphics processor business – suffered declines, but the chip designer still managed to post increase in revenue and even returned to profitability thanks to orders for chips that power next-generation game consoles from Microsoft Corp. and Sony Corp.

“AMD returned to profitability and generated free cash flow in the third quarter as we continued to successfully execute the strategic transformation plan we outlined a year ago. We achieved 26% sequential revenue growth driven by our semi-custom business and remain committed to generating approximately 50% of revenue from high-growth markets over the next two years. Developing industry-leading technology remains at our core, and we are in the middle of a multi-year journey to redefine AMD as a leader across a more diverse set of growth markets,” said Rory Read, president and chief executive of AMD.

For Q3 2013, AMD reported revenue for the third quarter of 2013 of $1.46 billion, operating income of $95 million and net income of $48 million, or $0.06 per share. The company reported non-GAAP operating income of $78 million and non-GAAP net income of $31 million, or $0.04 per share. Gross margin for the quarter was 36% in Q3 2013, down from 40% in Q2 2013 and 41% in Q1 2013. Operating expenses were $426 million; R&D was $288 million, 20% of net revenue; SG&A was $155 million, 11% of net revenue.

Computing Solutions segment revenue (which includes microprocessors, accelerated processing units, chipsets, embedded processors and server chips) was $790 million (historic low for CS was $751 million per quarter), down 6% sequentially, due to decreased notebook and chipset unit shipments, partially offset by an increase in desktop unit shipments. Computing Solutions operating income was $22 million, an improvement from operating income of $2 million in Q2 2013. Q3 2013 operating income included the impact of a $19 million benefit from sales of previously reserved inventory and Q2 2013 operating income included the impact of a similar $11 million benefit.

  • Client product revenue decreased sequentially due to lower notebook microprocessor sales in the quarter.
  • AMD did not provide any details regarding performance of its Opteron business unit.
  • Microprocessor ASP was flat sequentially. 

Graphics and Visual Solutions (GVS) segment revenue (which includes consumer and professional GPUs, revenue from semi-custom products and development and game console royalties) was $671 million, up 110% compared to the prior quarter, driven by AMD’s semi-custom business due to Sony and Microsoft next generation video game consoles due in Q4. GVS segment operating income was $79 million, up from breakeven in the prior quarter primarily due to increased revenue. Operating margin for the semi-custom business was in the mid-teens, primarily due to higher revenue and a smooth ramp in AMD’s first full quarter of production.

  • Graphics processing unit (GPU) revenue declined sequentially from $320 million in the prior quarter.
  • Shipments of semi-custom accelerated processing units for Microsoft Xbox One and Sony PlayStation 4, royalties for Xbox 360, Wii and Wii U game consoles and some other benefits totaled over $351 million.
  • GPU ASP decreased sequentially.
  • Professional Graphics revenue reached a record high. 

For Q4 2013 AMD expects revenue to increase 5% sequentially +/-3%; non-GAAP operating expenses to be approximately $450 million; non-GAAP gross margin to be approximately 35%; Inventory to be flat compared to Q3 2013 ($922 million).

Tags: AMD, Business, Playstation, Xbox, Xbox One, PlayStation 4, ATI, Radeon, Fusion, Bulldozer, Temash, Kabini, Piledriver, Orochi, Zambezi, Trinity, Llano, Brazos


Comments currently: 19
Discussion started: 10/18/13 03:48:39 PM
Latest comment: 01/24/14 06:08:58 AM
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Great news for AMD overall. Thanks to the contracts they have with MS and Sony for their next gen consoles AMD including the Nintendo, they have now dominated that market segment and they really needed to dominate a profitable segment to get back on track and this was it. Best news I've heard coming from AMD in a while.....
3 2 [Posted by: SteelCity1981  | Date: 10/18/13 03:48:39 PM]

show the post
0 3 [Posted by: TAViX  | Date: 10/18/13 03:52:44 PM]
- collapse thread

"•Graphics processing unit (GPU) revenue declined sequentially from $320 million in the prior quarter."
2 1 [Posted by: KeyBoardG  | Date: 10/18/13 08:15:19 PM]
Huh? That's not what I read. From the GVS section.

Point #1
•Graphics processing unit (GPU) revenue declined sequentially from $320 million in the prior quarter.

Point #2
•Shipments of semi-custom accelerated processing units for Microsoft Xbox One and Sony PlayStation 4, royalties for Xbox 360, Wii and Wii U game consoles and some other benefits totaled over $351 million.

The console contracts generated more revenue that GPU sales, or am I reading it incorrectly? The Sony/MS items are more APU than GPU, aren't they?
1 1 [Posted by: sdsdv10  | Date: 10/18/13 08:18:18 PM]
APU is a CPU+GPU on the same die...
0 0 [Posted by: TAViX  | Date: 10/18/13 08:49:08 PM]

"Professional Graphics revenue reached a record high" WoW that's
a great achievement!!, congrats AMD....
3 0 [Posted by: tks  | Date: 10/18/13 07:57:47 PM]
- collapse thread

Absolutely! All they need now is to get the Server CPU business moving in a similar direction and their fortunes (both literally and metaphorically) will turn around.

GO AMD, GO !!!
1 1 [Posted by: JBG  | Date: 10/19/13 05:25:34 AM]
Rory Read, Q3 Conference Call

"as we delivered our fifth consecutive quarter of revenue and share growth in the professional graphics area"
1 1 [Posted by: JBG  | Date: 10/20/13 09:42:36 AM]

AMD's revised business model will see them gaining market share across all PC and other segments over the next two years. Kaveri will be be a big surge to AMD sales even in a worldwide economic meltdown that refuses to quit.
0 1 [Posted by: beenthere  | Date: 10/18/13 10:52:59 PM]
- collapse thread

We can only hope. In recent years (since Phenom) AMD have been consistently disappointing on the CPU architecture. So... *fingers crossed*
0 1 [Posted by: JBG  | Date: 10/19/13 05:27:18 AM]

By finding other market segments not reliant on Windows 8 looks like the way to go. If Microsoft persist with their present O/S policy then Intel will also chase other sectors of the market., and us poor PC users will be left for dead.
0 1 [Posted by: tedstoy  | Date: 10/19/13 08:40:25 AM]

Intel posted 7.5 Billion in income, and Nvidia posted 500 million in income. So 48 million from AMD isn't impressive at all (which is why their stock price plunged 13% on the announcement).

People (uninformed fanbois, mostly) keep acting like AMD is going to have some dramatic turn around that will see them rocket to the top. That kind of stuff only happens in the movies. Right now, AMD is just trying to coast into getting bought out, or going bankrupt.
2 1 [Posted by: AnonymousGuy  | Date: 10/20/13 02:09:55 AM]
- collapse thread

AMD reported revenue for the third quarter of 2013 of $1.46 billion
0 2 [Posted by: Mike Orcutt  | Date: 10/20/13 10:37:10 AM]
I prefer to look at income over revenue, but if you want to compare 1.46 billion, INTC put up 12.81B in revenue for Q3 2013.
1 1 [Posted by: AnonymousGuy  | Date: 10/20/13 02:40:37 PM]


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