Edit Symbol List
Enter up to 25 symbols separated by commas or spaces in the text box below. These symbols will be available during your session for use on applicable pages.
Don't know the stock symbol? Use the
Symbol Lookup tool.
Alphabetize the sort order of my symbols
Investing just got easier…
Sign up now to become a NASDAQ.com member and begin receiving instant notifications when key events occur that affect the stocks you follow.Access Now X
Advanced Micro Devices, Inc. (AMD)
Q4 2012 Earnings Call
January 22, 2013, 5:00 pm ET
Ruth Cotter – VP of IR
Rory Read – President, CEO
Devinder Kumar – SVP, CFO
Lisa Su – SVP, General Manager Global Business Units
David Wong – Wells Fargo
Patrick Walsh – Credit Suisse
Hans Mosesmann – Raymond James
CJ Muse – Barclays
Joseph Moore – Morgan Stanley
JoAnne Feeney - Longbow Research
Adeline Lee – Citi
Mark Delaney – Goldman Sachs
Steven Eliscu – UBS
Aashish Rao – Bank of America
Previous Statements by AMD
» Advanced Micro Devices Management Discusses Q3 2012 Results - Earnings Call Transcript
» Advanced Micro Devices Management Discusses Q2 2012 Results - Earnings Call Transcript
» Advanced Micro Devices' CEO Hosts Annual Meeting of Stockholders (Transcript)
As a reminder, this conference call is being recorded. I would now like to introduce your host for today’s conference, Ruth Cotter, Vice President of Investor relations. Please go ahead.
Thank you and welcome to AMD’s fourth quarter and year-end earnings conference call. By now, you should have had the opportunity to review a copy of our earnings release and the CFO commentary. If you have not reviewed those documents, they can be found on AMD’s website at quarterlyearnings.amd.com.
Participants on today’s call are Rory Read, our President and Chief Executive Officer, and Devinder Kumar, our Senior Vice President and Chief Financial Officer. Lisa Su, our Senior Vice President and General Manager Global Business Unit will be present for the QA portion of the call.
This is a live call and will be replayed via webcast on amd.com. I’d like to take this opportunity to highlight a few dates for you. John Burn, Senior Vice President and Chief Sales Office, will present and the Goldman Sachs Technology and Internet conference on February 12th in San Francisco.
Rory Read will present at the Morgan Stanley Technology and Media Telecomm conference on February 26th in San Francisco. Our first quarter quiet time will begin at the close of business on Friday, March 15th.
And lastly, we intend to announce our first quarter earnings on April 18th. Dial in information for the call will be provided in mid-March. Please note, non-GAAP financial measures referenced during this call are reconciled to their most directly comparable GAAP financial measures in the press release and CFO commentary posted on our website.
Before we begin, let me remind everyone that today’s discussion contains forward-looking statements based on the environment as we currently see it. Those statements are based on current beliefs, assumptions and expectations, speak only as of the current date and, as such, involve risks and uncertainties that could cause actual results to differ materially from our current expectations.
Please refer to the cautionary statement in our press release for more information. You will also find detailed discussions about our risk factors in our filings with the SEC and, in particular, AMD’s quarterly report on Form 10-Q for the quarter ended September 29, 2012.
Now with that, I’d like to hand the call over to Rory Read, AMD’s President and CEO. Rory?
Thank you, Ruth. We made progress in the fourth quarter delivering on our commitments, managing expense and cash, and beginning to transform AMD for long term growth and profitability. However, full year results fell short of our expectation, as the challenging macro-environment resulted in a weaker than expected PC market.
As I mentioned on our last earnings call, we are executing a turnaround that will take several quarters. We expect continued choppiness in the PC market in the first half of 2013, and we will closely manage the business as we reset, restructure, and ultimately transform AMD.
We have the right strategy and a new set of products coming to market in 2013. We continue to make the investments required to drive a larger percentage of our revenue in the high-growth adjacent markets: dense server, semicustom, embedded, and ultra-low power client markets.
We are implementing three phases of our turnaround. First, complete the restructuring of our business. This is a critical step in reducing our operating cost model to enable a return to profitability. Second, accelerate our business in 2013 by executing the delivery and launch of a new set of powerful product offerings. And third, transform AMD to take advantage of high-growth opportunities in adjacent markets where our IP provides a competitive advantage.
As with any turnaround, it is critical we meet our commitments throughout each step. To that end, we effectively managed our costs, reduced our inventory, and maintained our cash above our minimum acceptable levels in the fourth quarter. Revenue of $1.55 billion met our guidance, while decreasing 9% sequentially and by 32% from a year ago.
For the second year in a row, we had a successful Black Friday as sales of AMD-based notebooks in North American retail grew from a year ago. As a result, nearly one in every three notebooks sold in U.S. retail in the fourth quarter were powered by AMD.
We also saw a sequential increase in desktop microprocessor ASP based on strong channel adoption of our new Athlon FX CPU and A-Series APUs in the quarter. The value proposition of our latest processors drove demand and helped reduce channel inventory. Customers continued to embrace the differentiated value proposition of our APUs.
We added Visio as a new customer based on the industry-leading graphics performance and long battery life of AMD’s APUs. Visio’s first AMD-based products will include two touch-based ultrathin and a Windows 8 tablet.
Now turning to our server business, we recorded significant revenue growth for our SeaMicro dense servers, driven by large-scale cloud data center wins. SeaMicro solutions are being deployed and evaluated by a broad variety of marquee customers, demonstrating the value of our investment in dense server and setting the stage for continued future growth.
Our graphics business performed well in the quarter as well, highlighted by record workstation and gaming revenue and the launch of the Nintendo Wii U game system powered by AMD graphics technology.
To help accelerate desktop GPU sales in the channel and reinforce our long term strategy to be a leader in gaming, we launched the “Never Settle” campaign in the quarter. This promotion was well-received by partners and consumers, as we bundled some of the season’s hottest games with our highest-performing graphics cards.
In the channel, unit shipments and revenue for our high-end Radeon graphics grew, driving a richer mix and increased ASP from the previous quarter.