Advanced Micro Devices Inc. (AMD)
Q3 2009 Earnings Call
October 15, 2009 5:00 pm ET
Ruth Cotter – Director of Investor Relations
Dirk R. Meyer – President and Chief Executive Officer
Thomas Seifert – Chief Financial Officer
Robert J. Rivet – Chief Operations and Administrative Officer
Doug Freedman - Broadpoint Am Tech
Ross Seymore - Deutsche Bank Securities
Chris Danely - J.P. Morgan
Glen Yeung - Citigroup
David Wong - Wells Fargo Securities LLC
Joanne Feeney - FTN Capital Markets
Tim Luke - Barclays Capital
John Pitzer - Credit Suisse
Patrick Wang - Wedbush Morgan Securities
James Covello - Goldman Sachs
Uche Orji - UBS
David Wu - GC Research Ltd.
Kevin Cassidy - Thomas Weisel Partners
[Hans Osefin] – Raymond James
Alex Gauna - JMP Securities
Craig Berger - FBR Capital Markets
Adam Benjamin - Jefferies & Co.
Previous Statements by AMD
» Advanced Micro Devices Inc. Q2 2009 Earnings Call Transcript
» Advanced Micro Devices Inc. Q1 2009 Earnings Call Transcript
» Advanced Micro Devices, Inc. Q4 2008 Earnings Call Transcript
I would now like to turn the conference over to Miss Ruth Cotter, Director of Investor Relations for AMD. Please go ahead.
Thank you and welcome to AMD’s third quarter earnings conference call. Our participants today are Dirk Meyer, our President and CEO and Bob Rivet, our Chief Operations and Administrative Officer.
This is a live call and will be replayed via webcast on AMD.com. There will also be a telephone replay. The replay number is 888-258-7854. Outside of the United States the number is 703-925-2490. The access code for both is 1397389. The telephone replay will be available for the next 10 days starting later this evening.
I would like to take this opportunity to remind everyone that AMD will hold its Financial Analysts Day on November the 11th at its headquarters in Sunnyvale, California. I would also like to bring to your attention that our Q4 2009 earnings quiet time will begin at the close of business on Friday, December the 11th.
References to AMD on this earnings call refer to AMD Product Company, which refers to the operating results of AMD excluding our Foundry segment and intersegment eliminations. We provide a reconciliation of AMD Product Company to AMD consolidated operating results, which are reported for GAAP purposes in today’s earnings press release issued earlier this afternoon.
Before we begin today’s call I would like to caution everyone that we will be making forward-looking statements about management’s expectations. Investors are cautioned that those statements are based on current beliefs, assumptions and expectations, speak only as of the current date and involve risks and uncertainties that could cause actual results to differ materially from our current expectations. The semiconductor industry is generally volatile, and market conditions are particularly difficult to forecast, especially in light of the current state of the economy. We encourage you to review our filings with the SEC where we review the risk factors, setting forth information that could cause actual results to differ materially from our expectations. You will find detailed discussions about such risk factors in our most recent SEC filing, AMD’s quarterly earnings report on Form 10-Q for the quarter ended June 27, 2009.
With that, I’d like to turn the call over to Dirk. Dirk?
Dirk R. Meyer
Thanks Ruth, and thank [audio impairment] on the phone for joining us today. Before we begin, I would like to introduce the newest member of our management team, Mr. Thomas Seifert, who is taking over the CFO role. Thomas, welcome aboard.
Thank you, Dirk. I’m excited to be here and I look forward to getting to work with all of you out there in the year’s ahead beginning with our upcoming Financial Analysts Day in November.
Dirk R. Meyer
So again welcome Thomas, and I also want to thank Bob for your steady hand in this arena over the past nine years. I know you’re really looking forward to having 100% focus on your new role as Chief Operations and Administrative Officer.
Turning now to the business. Third quarter consumer PC demand continued to improve from prior periods, with particular strength in notebooks and in China and continued recovery in Europe and in North America. And it appears the commercial IT markets are positioned to improve next year.
We experienced very strong global demand for our discrete graphics offerings, particularly in the notebook sector, as consumers continued to value graphics rich PC experience. And I’m really encouraged by our financial performance in the quarter. We grew revenues by 18% sequentially. We improved our gross margins through a continued transition to 45 nanometer CPUs, increased factory utilization and higher CPU ASPs. And we controlled expenses very well, reducing OpEx by 9%. And most importantly, AMD the Product Company put a positive number on the bottom line.
Meanwhile, we delivered on each of the three key pillars of our differentiation, platforms, discrete graphics leadership and marketing focused on real world end user needs. With respect to platforms, our momentum continues to build with HP, Acer, Toshiba, ASUSTeK and MSI all announcing plans to introduce more than 70 notebooks based on AMD’s latest generation of mainstream and ultra-thin platforms.
In servers, HP, IBM and Dell are all using our new Six-Core AMD Opteron Processors to meet the growing demand for energy efficient and high density server platforms. We now offer 15 full featured, low and very low power options for cloud computing deployments and hyper-scale data centers.
Our graphics business continues to gain momentum as we added to our industry leading discrete graphics portfolio. The rating on HD 5870 captured the graphics performance title, winning greater than 50 industry awards up to this point. The rating in HD 5000 family is the first in the industry designed to take advantage of Microsoft’s next generation, Direct X11 technology. We believe this new offering is uniquely well positioned to take advantage of Microsoft’s Windows 7 upcoming rollout. And the HD 5000 family also supports our widely acclaimed Ifinity multi-display technology, allowing a single PC to drive up to six high def monitors.