AMD Updates Second Quarter Outlook

SUNNYVALE, CA (Mar짯ket짯wired) 07/06/15 AMD (NASDAQ: AMD) today announ짯ced that reve짯nue for the second quar짯ter ended June 27, 2015 is expec짯ted to be lower than pre짯vious짯ly gui짯ded. The com짯pa짯ny now expects second quar짯ter reve짯nue to decrease appro짯xi짯m짯ate짯ly 8 per짯cent sequen짯ti짯al짯ly, com짯pared to the pre짯vious gui짯dance of down 3 per짯cent, plus or minus 3 per짯cent. The sequen짯ti짯al decrease is pri짯ma짯ri짯ly due to wea짯k짯er than expec짯ted con짯su짯mer PC demand impac짯ting the company셲 Ori짯gi짯nal Equip짯ment Manu짯fac짯tu짯rer (OEM) APU sales. The com짯pa짯ny expects second quar짯ter chan짯nel sales and chan짯nel inven짯to짯ry reduc짯tion efforts to be in-line with the company셲 plans.

The com짯pa짯ny anti짯ci짯pa짯tes non-GAAP gross mar짯gin to be appro짯xi짯m짯ate짯ly 28 per짯cent, com짯pared to the pre짯vious non-GAAP gui짯dance of appro짯xi짯m짯ate짯ly 32 per짯cent pri짯ma짯ri짯ly due to a hig짯her mix of Enter짯pri짯se, Embedded and Semi-Cus짯tom seg짯ment sales and lower than anti짯ci짯pa짯ted Com짯pu짯ting and Gra짯phics seg짯ment APU unit volu짯mes due to wea짯k짯er than expec짯ted OEM PC pro짯duct demand. Addi짯tio짯nal짯ly the com짯pa짯ny anti짯ci짯pa짯tes GAAP gross mar짯gin to be fur짯ther impac짯ted by a one-time char짯ge of appro짯xi짯m짯ate짯ly $33 mil짯li짯on asso짯cia짯ted with a tech짯no짯lo짯gy node tran짯si짯ti짯on from 20 nano짯me짯ter (nm) to Fin짯FET. The com짯pa짯ny star짯ted seve짯ral pro짯duct designs in 20nm that will ins짯tead tran짯si짯ti짯on to the lea짯ding-edge Fin짯FET node.

Cash and cash equi짯va짯lents at the end of the second quar짯ter are expec짯ted to be appro짯xi짯m짯ate짯ly $830 mil짯li짯on, in line with expectations.

AMD will report second quar짯ter 2015 results after mar짯ket clo짯se on Thurs짯day, July 16, 2015. AMD will hold a con짯fe짯rence call for the finan짯cial com짯mu짯ni짯ty at 2:30 p.m. PT (5:30 p.m. ET) that day to dis짯cuss second quar짯ter finan짯cial results and to pro짯vi짯de infor짯ma짯ti짯on regar짯ding expec짯ted third quar짯ter results. AMD will pro짯vi짯de a real-time audio broad짯cast of the tele짯con짯fe짯rence on the Inves짯tor Rela짯ti짯ons page at http://www.amd.com. The web짯cast will be available for 10 days after the con짯fe짯rence call.

About AMD
AMD (NASDAQ: AMD) designs and inte짯gra짯tes tech짯no짯lo짯gy that powers mil짯li짯ons of intel짯li짯gent devices, inclu짯ding per짯so짯nal com짯pu짯ters, tablets, game con짯so짯les and cloud ser짯vers that defi짯ne the new era of sur짯round com짯pu짯ting. AMD solu짯ti짯ons enable peo짯p짯le ever짯y짯whe짯re to rea짯li짯ze the full poten짯ti짯al of their favo짯ri짯te devices and appli짯ca짯ti짯ons to push the boun짯da짯ries of what is pos짯si짯ble. For more infor짯ma짯ti짯on, visit www.amd.com.

AMD and the AMD Arrow logo are trade짯marks of Advan짯ced Micro Devices, Inc. 

AMD셲 con짯so짯li짯da짯ted finan짯cial data for the quar짯ter ended June 27, 2015 has not been fina짯li짯zed. AMD셲 expec짯ta짯ti짯ons with respect to the preli짯mi짯na짯ry unau짯di짯ted results for the second quar짯ter dis짯cus짯sed abo짯ve are based upon its esti짯ma짯tes and sub짯ject to com짯ple짯ti짯on of its finan짯cial clo짯sing pro짯ce짯du짯res. This sum짯ma짯ry is not a com짯pre짯hen짯si짯ve state짯ment of AMD셲 finan짯cial results for this peri짯od, and AMD셲 actu짯al results upon com짯ple짯ti짯on of AMD셲 finan짯cial clo짯se pro짯ce짯du짯res may dif짯fer mate짯ri짯al짯ly from the짯se esti짯ma짯tes. This press release con짯ta짯ins for짯ward-loo짯king state짯ments con짯cer짯ning AMD, its second quar짯ter 2015 reve짯nue, chan짯nel sales, gross mar짯gin, non-GAAP gross mar짯gin and its cash and cash equi짯va짯lent balan짯ces, which are made pur짯su짯ant to the Safe Har짯bor pro짯vi짯si짯ons of the Pri짯va짯te Secu짯ri짯ties Liti짯ga짯ti짯on Reform Act of 1995. For짯ward-loo짯king state짯ments are com짯mon짯ly iden짯ti짯fied by words such as 쐗ould, 쐌ay, 쐃xpects, 쐀elie짯ves, 쐏lans, 쐇ntends, 쐏ro짯jects and other terms with simi짯lar mea짯ning. Inves짯tors are cau짯tio짯ned that the for짯ward-loo짯king state짯ments in this release are based on cur짯rent beliefs, assump짯ti짯ons and expec짯ta짯ti짯ons, speak only as of the date of this release and invol짯ve risks and uncer짯tain짯ties that could cau짯se actu짯al results to dif짯fer mate짯ri짯al짯ly from cur짯rent expec짯ta짯ti짯ons. Risks include that Intel Corporation셲 domi짯nan짯ce of the micro짯pro짯ces짯sor mar짯ket and its aggres짯si짯ve busi짯ness prac짯ti짯ces may limit AMD셲 abili짯ty to com짯pe짯te effec짯tively; that AMD reli짯es on Glo짯bal짯Found짯ries Inc. (GF) to manu짯fac짯tu짯re most of its micro짯pro짯ces짯sor and APU pro짯ducts and cer짯tain of its GPU and semi-cus짯tom pro짯ducts. If GF is not able to satis짯fy its manu짯fac짯tu짯ring requi짯re짯ments, AMD셲 busi짯ness could be adver짯se짯ly impac짯ted; that AMD reli짯es on third par짯ties to manu짯fac짯tu짯re its pro짯ducts, and if they are unable to do so on a time짯ly basis in suf짯fi짯ci짯ent quan짯ti짯ties and using com짯pe짯ti짯ti짯ve tech짯no짯lo짯gies, AMD셲 busi짯ness could be mate짯ri짯al짯ly adver짯se짯ly affec짯ted; fail짯ure to achie짯ve expec짯ted manu짯fac짯tu짯ring yields for AMD셲 pro짯ducts could nega짯tively impact its finan짯cial results; the suc짯cess of its busi짯ness is depen짯dent upon its abili짯ty to intro짯du짯ce pro짯ducts on a time짯ly basis with fea짯tures and per짯for짯mance levels that pro짯vi짯de value to its cus짯to짯mers while sup짯port짯ing and coin짯ci짯ding with signi짯fi짯cant indus짯try tran짯si짯ti짯ons; if AMD can짯not gene짯ra짯te suf짯fi짯ci짯ent reve짯nue and ope짯ra짯ting cash flow or obtain exter짯nal finan짯cing, it may face a cash short짯fall and be unable to make all of its plan짯ned invest짯ments in rese짯arch and deve짯lo짯p짯ment or other stra짯te짯gic invest짯ments; that AMD may not be able to suc짯cessful짯ly imple짯ment its busi짯ness stra짯tegy to refo짯cus its busi짯ness to address mar짯kets bey짯ond AMD셲 core PC mar짯ket to high-growth adja짯cent mar짯kets; the com짯ple짯ti짯on and impact of the 2014 res짯truc짯tu짯ring plan and its trans짯for짯ma짯ti짯on initia짯ti짯ves could adver짯se짯ly affect AMD; glo짯bal eco짯no짯mic uncer짯tain짯ty may adver짯se짯ly impact AMD셲 busi짯ness and ope짯ra짯ting results; AMD may not be able to gene짯ra짯te suf짯fi짯ci짯ent cash to ser짯vice its debt obli짯ga짯ti짯ons or meet its working capi짯tal requi짯re짯ments; AMD has a sub짯stan짯ti짯al amount of indeb짯ted짯ness which could adver짯se짯ly affect its finan짯cial posi짯ti짯on and pre짯vent it from imple짯men짯ting its stra짯tegy or ful짯fil짯ling its con짯trac짯tu짯al obli짯ga짯ti짯ons; the agree짯ments gover짯ning AMD셲 notes and its amen짯ded and resta짯ted seni짯or secu짯red asset based line of cre짯dit for a prin짯ci짯pal amount up to $500 mil짯li짯on (Secu짯red Revol짯ving Line of Cre짯dit) impo짯se rest짯ric짯tions on AMD that may adver짯se짯ly affect AMD셲 abili짯ty to ope짯ra짯te its busi짯ness; the mar짯kets in which AMD셲 pro짯ducts are sold are high짯ly com짯pe짯ti짯ti짯ve; the loss of a signi짯fi짯cant cus짯to짯mer may have a mate짯ri짯al adver짯se effect on it; AMD셲 receipt of reve짯nue from its semi-cus짯tom SoC pro짯ducts is depen짯dent upon AMD셲 tech짯no짯lo짯gy being desi짯gned into third-par짯ty pro짯ducts and the suc짯cess of tho짯se pro짯ducts; the demand for AMD셲 pro짯ducts depends in part on the mar짯ket con짯di짯ti짯ons in the indus짯tries into which they are sold. Fluc짯tua짯tions in demand for AMD셲 pro짯ducts or a mar짯ket decli짯ne in any of the짯se indus짯tries could have a mate짯ri짯al adver짯se effect on AMD셲 results of ope짯ra짯ti짯ons; AMD셲 abili짯ty to design and intro짯du짯ce new pro짯ducts in a time짯ly man짯ner is depen짯dent upon third-par짯ty intellec짯tu짯al pro짯per짯ty; AMD depends on third-par짯ty com짯pa짯nies for the design, manu짯fac짯tu짯re and sup짯p짯ly of mother짯boards, BIOS soft짯ware and other com짯pu짯ter plat짯form com짯pon짯ents to sup짯port its busi짯ness; if AMD loses Micro짯soft Corporation셲 sup짯port for its pro짯ducts or other soft짯ware ven짯dors do not design and deve짯lop soft짯ware to run on AMD셲 pro짯ducts, its abili짯ty to sell AMD pro짯ducts could be mate짯ri짯al짯ly adver짯se짯ly affec짯ted; AMD may incur future impairm짯ents of good짯will; uncer짯tain짯ties invol짯ving the orde짯ring and ship짯ment of AMD셲 pro짯ducts could mate짯ri짯al짯ly adver짯se짯ly affect AMD; AMD셲 reli짯ance on third-par짯ty dis짯tri짯bu짯tors and AIB part짯ners sub짯jects AMD to cer짯tain risks; AMD셲 ina짯bi짯li짯ty to con짯ti짯nue to attract and retain qua짯li짯fied per짯son짯nel may hin짯der its pro짯duct deve짯lo짯p짯ment pro짯grams; in the event of a chan짯ge of con짯trol, AMD may not be able to repurcha짯se all of the out짯stan짯ding debt as requi짯red by the appli짯ca짯ble inden짯tures and its Secu짯red Revol짯ving Line of Cre짯dit, which would result in a default under the inden짯tures and its Secu짯red Revol짯ving Line of Cre짯dit; and the semi짯con짯duc짯tor indus짯try is high짯ly cycli짯cal and has expe짯ri짯en짯ced seve짯re down짯turns that have mate짯ri짯al짯ly adver짯se짯ly affec짯ted, and may con짯ti짯nue to mate짯ri짯al짯ly adver짯se짯ly affect, AMD셲 busi짯ness in the future. Inves짯tors are urged to review in detail the risks and uncer짯tain짯ties in AMD셲 Secu짯ri짯ties and Exch짯an짯ge Com짯mis짯si짯on filings, inclu짯ding but not limi짯t짯ed to AMD셲 Quar짯ter짯ly Report on Form 10멡 for the quar짯ter ended March 28, 2015.

Source: Advan짯ced Micro Devices