AMD Reports Fourth Quarter and Annual Results
SUNNYVALE, Calif. -- January 22, 2009 --AMD (NYSE:AMD) today reported fourth quarter 2008 revenue from continuing operations1 of $1.162 billion. Fourth quarter 2008 revenue decreased 35 percent compared to the third quarter of 2008 and 33 percent compared to the fourth quarter of 2007. Fourth quarter 2008 revenue was down 28 percent sequentially, excluding third quarter 2008 process technology license revenue of $191 million.
In the fourth quarter of 2008, AMD reported a net loss of $1.424 billion, or $2.34 per share. For continuing operations, fourth quarter 2008 loss was $1.414 billion, or $2.32 per share, and the operating loss was $1.274 billion. The results for continuing operations include an unfavorable impact of $996 million, or $1.64 per share as described in the table below. Loss from discontinued operations was $10 million, or $0.02 a share.
For the year ended December 27, 2008, AMD achieved revenue of $5.808 billion. Fiscal 2008 net loss was $3.098 billion. AMD reported revenue of $5.858 billion and a net loss of $3.379 billion for fiscal 2007.
In the third quarter of 2008, AMD had revenue from continuing operations of $1.797 billion, including process technology license revenue of $191 million, a net loss of $127 million, income from continuing operations of $23 million and operating income of $122 million. In the fourth quarter of 2007, AMD had revenue from continuing operations of $1.737 billion, a net loss of $1.772 billion, a loss from continuing operations of $1.298 billion and an operating loss of $1.187 billion.
"Although industry visibility is poor, our priorities remain clear and achievable," said Dirk Meyer, AMD's president and CEO. "We remain focused on further reducing our breakeven point through targeted restructuring actions while ensuring we execute our highly-competitive product and technology roadmaps. We made significant progress toward the creation of 'The Foundry Company' in the quarter, and anticipate closing the transaction in February. We expect our ongoing restructuring actions and asset smart strategy, combined with the strength of our innovative product offerings, will leave us well positioned for a global market recovery."
Fourth quarter 2008 gross margin was 23 percent, including a negative impact of 20 percentage points due to a $227 million incremental write down of inventory due to weak market conditions. Third quarter 2008 gross margin was 51 percent, 45 percent excluding process technology license revenue.
AMD's outlook statements are based on current expectations of its continuing operations. The following statements are forward looking, and actual results could differ materially depending on market conditions and the factors set forth under "Cautionary Statement" below.
In light of the current macroeconomic conditions, very limited visibility and continued corrections in the supply chain, AMD expects first quarter 2009 revenue to decrease from the fourth quarter 2008.
The formation of 'The Foundry Company' remains on track to close in February. AMD and the Advanced Technology Investment Company (ATIC) obtained clearance from the Committee on Foreign Investment in the United States ("CFIUS") regarding the creation of "The Foundry Company". In addition, the Empire State Development Corporation and the New York Public Authorities Control Board approved the transfer of development incentives from AMD to "The Foundry Company."
AMD announced the widespread availability and broad OEM, ISV, channel and system builder support for its 45nm Quad-Core AMD Opteron processor. HP, Dell, IBM and Sun Microsystems introduced more than a dozen new systems designed to take advantage of the new Quad-Core AMD Opteron processor's superior virtualization performance, energy-efficiency and platform stability. Additionally, Microsoft® selected the new AMD processor for its Windows® Azure cloud computing service.
* Quad-Core AMD Opteron processor-based servers captured the top VMmark virtualization performance scores for 2-, 4- and 8-socket servers while two-socket servers based on the new processor have achieved the four highest SPECweb2005 scores. SPECweb2005 is a leading performance indicator for Web 2.0 and Cloud Computing environments.
AMD Opteron processors now help drive seven of the Top 10 supercomputer systems in the world, including "Jaguar," the first ever wholly x86-based supercomputer to achieve the petaflop performance milestone.
AMD announced the availability of the AMD platform for ultrathin notebooks, codenamed "Yukon", based on the new AMD Athlon Neo processor, ATI Radeon X1250 integrated graphics and optional ATI Mobility Radeon HD 3410 discrete graphics. The first product offering based on the Yukon platform will be the HP Pavilion dv2 Entertainment Notebook PC, which was named "Best Notebook of CES" by Laptop magazine and is expected to be available in April.
AMD launched the "Dragon" platform for desktop PCs, featuring the new AMD Phenom II X4 processor. HP, Dell and Alienware plan to offer desktop systems based on the Dragon platform in the first quarter.
AMD continued to strengthen its leading-edge mobile graphics portfolio, with the introduction of the ATI Mobility Radeon 4000, the world's first TeraFLOPS class visual compute power in a notebook. Asus, MSI and Toshiba all introduced new ATI Mobility Radeon 4000-powered laptops. Additionally, Alienware and OCZ both released notebooks utilizing AMD's CrossfireX dual-GPU configurations based on the ATI Radeon HD 3800 series.
AMD expanded ATI Radeon HD 4800 series with the launch of the ATI Radeon HD 4830, which delivers exceptional game performance and is designed for an expanded PC gaming market segment.
AMD announced plans to create, in partnership with OTOY, the "AMD Fusion Render Cloud", a petaFLOPS-class supercomputer designed to process and electronically distribute HD video and gaming content to thin clients and handheld devices via HTML browsers when completed in the second half of 2009.
As part of the Company's strategy to focus on x86 computing and graphics technologies, AMD completed the sale of its Digital TV (DTV) processor business to Broadcom Corporation for $141.5 million in cash and the sale of technology assets, intellectual property and resources that formed the basis of its Handheld business to Qualcomm for $65 million in cash.
AMD will hold a conference call for the financial community at 2:00 p.m. PT (5:00 p.m. ET) today to discuss its fourth quarter financial results. AMD will provide a real-time audio broadcast of the teleconference on the Investor Relations page of its Web site at http://www.amd.com. The webcast will be available for 10 days after the conference call.
Advanced Micro Devices (NYSE: AMD) is an innovative technology company dedicated to collaborating with customers and partners to ignite the next generation of computing and graphics solutions at work, home and play. For more information, visit http://www.amd.com.