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Advanced Micro Devices Inc. (AMD)
Q4 2009 Earnings Call
January 21, 2010 5:00 pm ET
Ruth Cotter – Director of Investor Relations
Dirk R. Meyer – President and Chief Executive Officer
Thomas Seifert – Chief Financial Officer
Glen Yeung - Citigroup
Joanne Feeney - FTN Capital Markets
Tim Luke - Barclays Capital
John Pitzer - Credit Suisse
Uche Orji - UBS
Doug Freedman - Broadpoint Am Tech
Craig Berger - FBR Capital Markets
Patrick Wang - Wedbush Morgan Securities
Hans Mosesmann - Raymond James
Ross Seymore - Deutsche Bank Securities
David Wu - GC Research Ltd.
James Covello - Goldman Sachs
Christopher Danely - J.P. Morgan
Daniel Berenbaum - Auriga USA
Adam Benjamin - Jefferies & Co.
Good day, ladies and gentlemen, and welcome to your Advanced Micro Devices Q4 ’09 earnings call. (Operator Instructions)
And now it’s my pleasure to announce your host, Ruth Cotter.
Previous Statements by AMD
» Advanced Micro Devices Inc. Q3 2009 Earnings Call Transcript
» Advanced Micro Devices Inc. Q2 2009 Earnings Call Transcript
» Advanced Micro Devices Inc. Q1 2009 Earnings Call Transcript
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 888-266-2081. Outside of the United States the number is 703-925-2533. The access code for both is 1422675. The telephone replay will be available for the next ten days starting later this evening.
I’d like to take this opportunity to announce that AMD will hold its 2010 financial analyst day on November the 11th. We’ll provide you with more details including the location of the event over coming months.
I’d also like to call to your attention that our first quarter 2010 earnings quiet time will begin at the close of business on Friday, March 12th.
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.
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 our 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 discuss the risk factors that could cause actual results to differ materially from our expectations. You’ll 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 September 26, 2009.
And with that I’d like to turn the call over to Dirk Meyer, our CEO. Dirk?
Dirk R. Meyer
Thanks, Ruth, and thanks to everybody on the call for joining us today. A year ago in a very cloudy economic environment we outlined a bold game plan to transform this company into one designed to generate consistent profitability while exploiting the unique combination of x86 and graphics processing technology that only AMD possesses.
We’re pleased with our progress on this transformation, both in the quarter and throughout the past year. We promised to lower our breakeven point and we did. We promised to increase our focus on our core businesses, x86 microprocessors and graphics, and we have. We promised to execute on our roadmaps on time and on budget, and we did. We promised to expose the truth about the monopolistic environment in which we were operating and we did. We promised to execute our asset smart strategy and transform ourselves into a fabulous company and we did. And we made significant progress in improving our balance sheet, reducing our overall debt by more than $2.2 billion through the creation of global foundries and other debt transactions.
In short, we delivered on every major milestone to which we committed in the past year, placing ourselves in a much stronger position to succeed in the quarters ahead. In the meantime, our fourth quarter operating performance was solid and in an improving global economy we saw growing customer and end user to AMD platforms, products and marketing offerings, with particularly strong performance in our server and discrete graphics businesses.
In servers, customer adoption of the six core AMD Opteron Processor has been impressive, accounting for nearly 60% of our server revenue and half of our units. We saw particularly strong adoption in HPC and cloud computing cluster environments. In fact, AMD now powers the number one supercomputer in the world, the number one GPU powered supercomputer in the world and four of the top five supercomputers on the semiannual TOP500 computer list.
In discrete graphics, we’ve expanded our leadership position on the strength of the Radeon 5000 series, expanding our portfolio of the industry’s only DirectX 11 capable graphics processors. And we shipped more than 2 million DirectX 11 capable GPUs in the first three months after launch.
AMD’s world class sales and marketing engine is increasing its pace. Our innovative vision marketing campaign is gaining support across the industry and we were thrilled to expand the program in the commercial notebooks, with the first commercial notebook ThinkPad based on AMD Vision Pro technology.
Meanwhile our Fusion Partner Program is exceeding expectations in the component channel, securing over 100 new premier partners in its first full quarter of operation. In summary, our fourth quarter was a good balance of achieving strategic milestones and solid operating performance in an improving market. It also represents a springboard for the year ahead.