AMD Releases Q2 FY 2016 Financial Results

This afternoon, AMD announced their second quarter earnings for the 2016 fiscal year. It’s been a while, but AMD finds itself in the black for this quarter, with higher revenues, and thanks to $150 million from a joint venture with Nantong Fujitsu Microelectronics, AMD’s net income found its way into the positive column. AMD had revenues of $1.027 billion for the quarter, which is up 23% from last quarter, and more importantly up 9% from a year ago. Gross margin for the quarter was 31%, which is still not what AMD wants or needs to maintain profitability, but it is up 6% from their Q2 2015 results which is good news for the company. AMD did record an operating loss for the quarter of $8 million, but that’s a big improvement compared to the $68 million loss last quarter and $137 million loss in Q2 2015. Net income for this quarter was $68 million, or $0.08 per share, compared to a net loss of $109 million last quarter and a $181 million loss a year ago.

AMD also released Non-GAAP results which exclude restructuring charges and some other results. On a Non-GAAP basis, AMD had the same $1.027 billion in revenue, but showed a slight operating income of $3 million, compared to a $55 million operating loss last quarter and a $87 million loss last year. Looking at net results, AMD had a net loss of $40 million, or $0.05 per share, compared to a $96 million net loss last quarter and a $131 million net loss a year ago.

AMD attributes their revenue increase primarily to higher sales of its semi-custom SoCs, and with the announcement of the Xbox One Scorpio AMD has secured another design win there. Overall the Enterprise, Embedded, and Semi-Custom segment had revenues of $592 million for the quarter, which is up 5% from a year ago, once again attributed to the increased sales of semi-custom SoCs. The segment had an operating income of $84 million for the quarter, up from $27 million in Q2 2015.

AMD’s Computing and Graphics segment just had an important quarter with the launch of their first FinFet GPU design in the AMD Radeon RX 480. They’ve also been releasing several Carrizo based APUs and CPUs, as well as announcing Bristol Ridge, and all the while working on Zen. The Computing and Graphics segment had revenues of $435 million for the quarter, which is up 15% from Q2 2015. Notebook processor and GPU sales have been tagged as the reason for the revenue increase. The segment had an operating loss of $81 million, which is better than the $147 million operating loss a year ago, but still a bit way from profitability. Lowered expenses have helped them here quite a bit, but they still have some work to do. AMD’s average selling price of their notebook APUs decreased compared to Q2 2015, and GPU average selling price also declined.

Looking ahead to next quarter, AMD is expecting revenues to increase 18% from this quarter, plus or minus 3%.

Source: AMD Investor Relations

Assessing IBM’s POWER8, Part 1: A Low Level Look at Little Endian

A few months ago, IBM brought the relatively cheap S812LC server to the market, making sure the IBM POWER8 is within the budget of almost every datacenter. In this article we assess the capabilities of the “affordable” IBM POWER8 and compare with the Intel Xeon E5 v4 to offer you the very first Little Endian, level playing field benchmarks.  

Intel Announces Q2 FY 2016 Earnings

In addition to the interesting tidbit about Kaby Lake, Intel also found time today to announce their second quarter earnings for fiscal year 2016. Revenue was up 3% year-over-year, but net income and earnings per share took a big hit due to the restructuring announced in Q1. Revenue for the quarter was $13.5 billion, and while gross margin was down 3.6% to 58.9%, Intel did exceed their outlook on margins. Operating income for the quarter was $1.3 billion, compared to $2.9 billion a year ago, and net income was $1.3 billion as well, down from $2.7 billion last year. Earnings per share came in at $0.27 per share, down 51% from the $0.55 result a year ago.

To account for the restructuring fees and other charges, Intel has also released Non-GAAP results. Revenue was the same at $13.5 billion, and gross margin was 61.8%, which was down 1.3% from a year ago. Operating income was $3.2 billion, down 2% from last year, and net income was down 6% to $2.9 billion. Non-GAAP earnings per share came in at $0.59 per share, down 5% from the $0.62 recording in Q2 2015.

Looking forward to next quarter, Intel sees revenues at $14.9 billion, plus or minus $500 million, with margins around 60%, plus or minus a couple of percent.

Looking at the individual business lines, Intel now has a couple of additional business groupings. After the acquisition of Altera, the formed the Programmable Solutions Group, and they also have the New Technology Group to manage the products designed for wearables, cameras, and other segments. The longer tenured groups are still the Client Computing Group, Data Center Group, Internet of Things Group, Non-Volatile Memory Solutions Group, and Intel Security Group, as well as “All Other”.

The Client Computing Group is platforms for notebooks, desktops, tablets, phones, and wireless connectivity. This group had revenues of $7.3 billion for the quarter, down 3% year-over-year. Intel decreased sales of their notebook platforms by 5% compared to Q2 2015, but the average selling price increased 2%. Desktops decreased 7%, and average selling price increased 1%. Tablet platform volumes fell 49% to 5 million units. Overall, Client Computing Group unit volumes decreased 15% year-over-year, but average selling prices increased 13%.

The Data Center Group had revenues of $4.027 billion, which is up 5% year-over-year. Unit volumes were up 5% year-over-year, but average selling prices of this line was down 1%.

The Internet of Things group had revenues of $572 million, up 2% year-over-year, while the Non-Volatile Memory Solutions Group had revenues of $554 million, which is down 20% year-over-year. Intel Security Group revenue was up 10% year-over-year to $537 million, and the new Programmable Solutions Group had revenues of $465 million, up 30% from last quarter when they were acquired.

Intel’s quarter met their expectations, but the restructuring charges have taken a toll on their profitability. Perhaps the most exciting news from this announcement though is that Kaby Lake is now shipping, along side the latest 7360 LTE modem.

Source: Intel Investor Relations