AMD revenue forecast misses market estimates

AMD several years ago sold off the operations that manufacture its chips.

AMD followed up with the projection that Q1 revenue to decrease 14 percent, plus or minus three percent, sequentially.

The report has already had an impact on AMD’s share price – significant losses will do that – and that’s reflected by a 6.15% decline in value over the last 24 hours of trading. Gross margins are expected to rise from 30% in the fourth quarter of 2015 to 32% in the first quarter of 2016.

CEO Dr Lisa Su released the following statement to accompany the report: “AMD closed 2015 with solid execution fuelled by the second straight quarter of double-digit percentage revenue growth in our Computing and Graphics segment and record annual semi-custom unit shipments”.

AMD said it expected 2016 revenue to grow year-over-year, as it gears up to ship its Polaris graphic processing units in the middle of the year.

Looking into 2016 and beyond, Su was also confident that AMD would gain share in the PC processor market, which is dominated by Intel. It provides x86 microprocessors for desktop PCs under the AMD A-Series, AMD E-Series, AMD FX CPU, AMD Athlon CPU and APU, and AMD Sempron APU and CPU brands; and microprocessors for notebook and 2-in-1s under the AMD A-Series, AMD E-Series, AMD C-Series, AMD Z-Series, AMD FX APU, AMD Phenom, AMD Athlon CPU and APU, AMD Turion, and AMD Sempron APU and CPU brands. First-quarter revenues are pegged at $900.18 million and for the full year revenues are forecast at $3.94 billion.

The consensus Street estimate for AMD’s fourth quarter is a loss per share of between $0.12 and $0.13. Analysts had been expecting losses of 10 cents per share and $954.7 million in revenue. Revenue fell 23 percent to $958 million. Excluding stock-based compensation and other items, the per-share loss was 10 cents, compared with adjusted earnings of two cents a year earlier.

The overall chip industry was expected to fall off 3.5 percent for 2015, according to the Semiconductor Industry Association.

In the previous third quarter, AMD had a $65 million write-down of inventory, and it raised funds by entering into a $436 million joint venture with Nantong Fujitsu Microelectronics for test and assembly of chips. The Zen architecture based Summit Ridge processors should be competitive against Intel’s processors she said. AMD?s graphics and computing technologies power a variety of…