AMD Announces Q4 2016 Earnings

This afternoon, AMD announced their fourth quarter earnings for the 2016 fiscal year. 2016 was a challenging year for AMD, as they continue to expand their business away from only focusing on the PC market, and although they still have a long way to go, 2016 was an improvement on 2015. For Q4 AMD had revenues of $1.11 billion, which is up 15% from Q4 2015. Gross margin for the quarter was $351 million, up from $283 million a year ago. As a percentage, AMD’s gross margin was 32%, compared to 30% in Q4 2015. AMD had an operating loss of $3 million for the quarter, compared to a loss of $49 million a year ago, while net loss improved as well, from $102 million in Q4 2015 to $51 million this quarter. This resulted in a loss per share of $0.06, compared to a loss of $0.13 last year. AMD makes note that Q4 2016 was a 14-week quarter, compared to a 13-week quarter for Q3 2016 and Q4 2015.

For the full fiscal year, AMD had revenues of $4.27 billion, which is up 7%, but a sixth amendment to their wafer supply agreement hit their margins very hard in 2016. For the full year, AMD had margins of just 23%, which is a drop of 4% compared to 2015. Operating loss was $372 million for the year, compared to $481 million in 2015, and net loss was $497 million, compared to $660 million a year ago. For the full year, AMD had a net per share loss of $0.60, which is an improvement from the $0.84 loss in 2015.

AMD also reports Non-GAAP results, which exclude stock-based compensation, restructuring charges, node transition costs, and wafer agreement charges, to give a look at their core business. On a Non-GAAP basis, AMD had revenues of $1.11 billion, just like their GAAP numbers, but they posted operating income of $26 million for the quarter, compared to an operating loss of $39 million a year ago. Net loss was $8 million, compared to $79 million in Q4 2015, and loss per share was $0.01 compared to $0.10 a year ago.

AMD attributes their increase in revenue primarily due to increased GPU sales. AMD’s Computing and Graphics segment had revenues for the quarter of $600 million, which is up 28% year-over-year. Polaris seems to be doing quite well, which is great to see. The segment still had an operating loss of $21 million, but that is a big improvement from the operating loss of $99 million a year ago. CPU average selling price fell year-over-year, but GPU average selling price increased year-over-year, thanks to higher desktop and professional graphics pricing. We eagerly await the launch of Ryzen, which AMD showed off last quarter, and expect to hear more about it this quarter.

AMD branched into Enterprise, Embedded, and Semi-Custom designs and it has proven to be a strong source of revenue for them. With wins in both the Xbox One and PlayStation 4, AMD continues to be the beneficiary of both of those consoles outselling their predecessors. For Q4, this segment had revenue of $506 million, which is up 4% year-over-year, thanks to higher embedded and semi-custom SoC revenue. This segment does have it’s ups and downs annually with consoles peaking and ebbing, but annually it has been a strong market for AMD to branch into. This segment had an operating income of $47 million for the quarter, which is down from $59 million a year ago, which AMD attributes to higher R&D investments this quarter.

Finally, All Other had an operating loss of $29 million, compared to $9 million a year ago. The increased loss is attributed to higher stock-based compensation charges for Q4 2016.

AMD had strong margins for this quarter, and if they are going to have a strong 2017, that needs to be their focus. Ryzen may help as well, depending on how it compares, but Dr. Lisa Su, AMD’s president and CEO, has been slowly but surely bringing AMD back to a point of profitability. Looking ahead, AMD expects revenues to decrease 11% for next quarter, plus or minus 3%, which would put them at an 18% increase in revenue for Q1 2017 compared to Q1 2016, if you pick the mid-point in their target.

Source: AMD Investor Relations

Intel Announces Record Quarterly Revenue And Full-Year Revenue

This afternoon, Intel announced their quarterly earnings for the fourth quarter of their 2016 fiscal year. Intel set a new record for revenue for this quarter, coming in at $16.4 billion. This is up 10% from a year ago. For the year, Intel brought in $59.4 billion, up 7% from their 2015 results. Intel’s gross margin fell 1.7 points to 60.9%, and they had an operating income of $12.9 billion, which is down 8% from a year ago. Net income was down 10% to $10.3 billion, and earnings per share fell 9% to $2.12.

Intel also reports Non-GAAP results, which exclude several expenditures, such as acquisition-related adjustments, write-downs, and the like. On a Non-GAAP basis, Intel had a gross margin of 63.1%, down 1.7 points, an operating income up 11% to $4.9 billion, and a net income up 4% to $3.9 billion. Non-GAAP earnings per share were up 4% to $0.79.

The gross margin impact is being attributed to a few things. Warranty and IP charges increased, as did spending on factory start-ups, due to the move to 10 nm coming this year, Client Computer Group non-platform costs, and the Non-Volatile Memory Solutions Group margins. Intel very much likes to keep their margins up above 60%, and for the moment they are still there even with these extra costs.

Intel breaks the company down into several groups. The main group is the Client Computing Group, which as the name implies, provides CPUs, SoCs, and wireless and wired connectivity products destined for PCs. Although the PC market is still down, this group had revenue for the year of $32.9 billion, which is up 2%, but platform volume is down 10%. Platform selling prices were up 11%, which makes up the difference. For just the last quarter, Client Computing Group had revenues of $9.1 billion, up 4% from a year ago. Platform volumes were down 7%, offset by selling prices up 7%. Desktop platform volume was down 9%, while notebook volumes were flat. Desktop average selling price (ASP) was up 2%, and notebook ASP was up 3%. Considering the down market, Intel continues to drive revenue here. While good for them, it means prices are high, and some competition in this space might help out the consumer.

The Data Center Group also had a strong quarter, and year. For the year, they had revenue of $17.2 billion, up from $16.0 billion a year ago. For the year, Intel saw volumes up 3% and ASP up 4%. For the most recent quarter, the Data Center Group had revenues of $4.7 billion, which was up 3%. Platform volumes were down 3%, with ASP up 6%.

Intel is slowly building it’s Internet of Things group, which had revenues for the year at $2.6 billion, up from $2.3 a year ago. Revenue for this quarter was up 5% to $726 million. The Non-Volatile Memory Solutions group had revenues for the quarter of $816 million, up 26% from a year ago, and a full-year revenue of $2.58 billion, down slightly from the $2.6 billion a year ago. Programmable Solutions is new for Intel this year, with the purchase of Altera, and this segment had revenue of $420 million for this quarter, and $1.7 billion for the year. All other revenue was $65 million for the quarter, up from $59 million a year ago.

2016 was a strong year for Intel, although it was not without its challenges. Earlier this year, Intel decided to get out of the mobile SoC space completely, abandoning it’s Atom architecture for this segment. Atom does live on for low power PCs, but any of the tablets that used the Cherry Trail Atom have found themselves without a new CPU to move to. The death of Tick-Tock also had its first new entrant in Kaby Lake, although you could easily argue Devil’s Canyon was a similar situation. But they have several new exciting technologies coming to market as well, such as 3D X-Point, and of course the expected launch of their 10 nm CPUs later this year.

Looking forward to Q1 2017, Intel is forecasting a midpoint revenue range of $14.8 billion, with margin estimates at 62%.

Source: Intel Investor Relations

Intel Announces Record Quarterly Revenue And Full-Year Revenue For Q4’2016

This afternoon, Intel announced their quarterly earnings for the fourth quarter of their 2016 fiscal year. Intel set a new record for revenue for this quarter, coming in at $16.4 billion. This is up 10% from a year ago. For the year, Intel brought in $59.4 billion, up 7% from their 2015 results. Intel’s gross margin fell 1.7 points to 60.9%, and they had an operating income of $12.9 billion, which is down 8% from a year ago. Net income was down 10% to $10.3 billion, and earnings per share fell 9% to $2.12.

Intel also reports Non-GAAP results, which exclude several expenditures, such as acquisition-related adjustments, write-downs, and the like. On a Non-GAAP basis, Intel had a gross margin of 63.1%, down 1.7 points, an operating income up 11% to $4.9 billion, and a net income up 4% to $3.9 billion. Non-GAAP earnings per share were up 4% to $0.79.

The gross margin impact is being attributed to a few things. Warranty and IP charges increased, as did spending on factory start-ups, due to the move to 10 nm coming this year, Client Computer Group non-platform costs, and the Non-Volatile Memory Solutions Group margins. Intel very much likes to keep their margins up above 60%, and for the moment they are still there even with these extra costs.

Intel breaks the company down into several groups. The main group is the Client Computing Group, which as the name implies, provides CPUs, SoCs, and wireless and wired connectivity products destined for PCs. Although the PC market is still down, this group had revenue for the year of $32.9 billion, which is up 2%, but platform volume is down 10%. Platform selling prices were up 11%, which makes up the difference. For just the last quarter, Client Computing Group had revenues of $9.1 billion, up 4% from a year ago. Platform volumes were down 7%, offset by selling prices up 7%. Desktop platform volume was down 9%, while notebook volumes were flat. Desktop average selling price (ASP) was up 2%, and notebook ASP was up 3%. Considering the down market, Intel continues to drive revenue here. While good for them, it means prices are high, and some competition in this space might help out the consumer.

The Data Center Group also had a strong quarter, and year. For the year, they had revenue of $17.2 billion, up from $16.0 billion a year ago. For the year, Intel saw volumes up 3% and ASP up 4%. For the most recent quarter, the Data Center Group had revenues of $4.7 billion, which was up 3%. Platform volumes were down 3%, with ASP up 6%.

Intel is slowly building it’s Internet of Things group, which had revenues for the year at $2.6 billion, up from $2.3 a year ago. Revenue for this quarter was up 5% to $726 million. The Non-Volatile Memory Solutions group had revenues for the quarter of $816 million, up 26% from a year ago, and a full-year revenue of $2.58 billion, down slightly from the $2.6 billion a year ago. Programmable Solutions is new for Intel this year, with the purchase of Altera, and this segment had revenue of $420 million for this quarter, and $1.7 billion for the year. All other revenue was $65 million for the quarter, up from $59 million a year ago.

2016 was a strong year for Intel, although it was not without its challenges. Earlier this year, Intel decided to get out of the mobile SoC space completely, abandoning it’s Atom architecture for this segment. Atom does live on for low power PCs, but any of the tablets that used the Cherry Trail Atom have found themselves without a new CPU to move to. The death of Tick-Tock also had its first new entrant in Kaby Lake, although you could easily argue Devil’s Canyon was a similar situation. But they have several new exciting technologies coming to market as well, such as 3D X-Point, and of course the expected launch of their 10 nm CPUs later this year.

Looking forward to Q1 2017, Intel is forecasting a midpoint revenue range of $14.8 billion, with margin estimates at 62%.

Source: Intel Investor Relations