- In addition to missing Q1 estimates, NASDAQ:AMD is guiding for Q2 revenue to be down 3% Q/Q (+/- 3%). That implies a range of $970M-$1.03B, below a $1.13B consensus.
- The company also announces it's "exiting" its high-density server business, the fruits of its $334M 2012 acquisition of SeaMicro. No word yet on whether AMD is seeking a buyer for SeaMicro, which has faced direct competition from HP (via its Moonshot servers) and indirect competition from the do-it-yourself hyperscale efforts of Internet giants. $75M worth of charges were taken in Q1.
- Computing/graphics segment (PC CPU/GPU) revenue fell 38% Y/Y in Q1 to $532M (PC weakness, share loss). PC CPU ASPs fell Q/Q and rose Y/Y. GPU ASPs rose Q/Q and fell Y/Y. The division had a $75M op. loss.
- Enterprise/embedded/semi-custom revenue (includes console APUs) fell 7% Y/Y to $498M due to lower server CPU sales (share loss). The division had a $45M op. profit.
- Gross margin (non-GAAP) remained under pressure, dropping to 32% from Q4's 34% and Q1 2014's 35%. Cost cuts led R&D spend to drop 13% Y/Y to $242M, and MG&A spend to fall 16% to $131M. AMD ended Q1 with $906M in cash (down $134M Q/Q) and $2.27B in debt (up $56M Q/Q).
- Shares have fallen to $2.63 AH. They rose 6.3% in regular trading ahead of earnings.
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Q1 results, PR, CFO commentary (.pdf), slides (.pdf)