AMD Earnings: Swinging to a Loss and Missing Estimates

On top of dropping to a loss in the third quarter, S&P 500 (NYSE:SPY) component Advanced Micro Devices Inc. (NYSE:AMD) also came in short of analyst estimates. Advanced Micro Devices is a semiconductor company with manufacturing, research and development, and sales and administrative facilities throughout the world. It provides processing solutions for the computing and graphics markets.

Earnings season is back and more important than ever. Get our newest CHEAT SHEET stock picks now

Advanced Micro Devices Inc. Earnings Cheat Sheet

Results: Reported a loss of $157 million (21 cents per diluted share) in the quarter. Advanced Micro Devices Inc. had a net income of $97 million or 13 cents per share in the year-earlier quarter.

Revenue: Fell 24.9% to $1.27 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Advanced Micro Devices Inc. fell short of the mean analyst estimate of 7 cents per share. It fell short of the average revenue estimate of $1.41 billion.

Quoting Management: “The PC industry is going through a period of very significant change that is impacting both the ecosystem and AMD,” said Rory Read, AMD president and CEO. “It is clear that the trends we knew would re-shape the industry are happening at a much faster pace than we anticipated. As a result, we must accelerate our strategic initiatives to position AMD to take advantage of these shifts and put in place a lower cost business model. Our restructuring efforts are designed to simplify our product development cycles, reduce our breakeven point and enable us to fund differentiated product roadmaps and strategic breakaway opportunities.”

Key Stats:

The company fell short of forecasts after beating estimates in the previous two quarters. In the second quarter, it topped the mark by 3 cents, and in the first quarter, it was ahead by 3 cents.

Revenue has fallen for the past three quarters. In the second quarter, revenue declined 10.2% to $1.41 billion while the figure fell 1.7% in the first quarter from the year earlier.

The company reported a net loss last quarter, after reporting a profit in the quarter prior. The company booked a profit of $590 million, or 80 cents per share, in the first quarter.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from 22 cents a share to 13 cents over the last sixty days. For the fiscal year, the average estimate has moved down from 75 cents a share to 60 cents over the last sixty days.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute — click here and get our CHEAT SHEET stock picks now.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

Don’t Miss These Additional Hot Stories:

Is Coca-Cola’s Stock a Buy After Earnings?

College Debt Bubble Update: Apollo Comes Back Down to Earth

Are P&G Shares Attractive Now?