AMD Inc. posts $89M profit in Q4; forecasts weaker revenue in current period

Nathan Andrada – Fourth Estate Cooperative Contributor

Sunnyvale, CA, United States (4E) – Advanced Micro Devices Inc. reported a profit in the fourth quarter, due to strong performance of its chips used in the latest game consoles from Microsoft and Sony, but predicted lower revenue for the current quarter.

Profit was $89mn, or 12 cents per share, for the quarter ended Dec. 28, compared with the previous year’s loss of $473mn, or 63 cents per share. Stripped of restructuring and other charges and amortization, AMD’s per-share earnings were six cents, from a 14-cent per share loss in the previous year. Analysts forecast the company’s per-share profit to be at five cents.

AMD said revenue rose 38 percent to $1.59bn, surpassing the company’s initial estimate in October of $1.53bn, which was slightly higher than analysts expected at the time. Gross margin, a vital gauge in the semiconductor industry, rose to 34.8 percent from 15.4 percent.

The increase was largely due to solid sales from AMD’s Graphics and Visual Solutions segment, which makes semi-custom chips that are used in game consoles that include Sony’s PlayStation 4 and Microsoft’s Xbox One.

The company’s unit that sells CPUs for PCs and servers did not do as good, as sales fell 13 percent year over year, a similar pattern seen in the previous six quarters.

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