SEMICONDUCTORS

AMD grows revenue in 2016 and narrows loss as it prepares to launch a slew of new products

The company said it will launch its new computer processor, Ryzen, in early March.

Posted January 31st, 2017

The good news continues for Advanced Micro Devices.

Sales of graphics processors and game consoles helped the chipmaker grow its fourth-quarter revenue by 15 percent to $1.1 billion, the company said Tuesday. 

AMD also reported a fourth-quarter loss of $51 million, which is half the loss the company reported in the same quarter a year ago. 

AMD’s share price rose more than 3 percent in after-hours trading. 

For the year, AMD grew its revenue by 7 percent and narrowed its loss to $497 million.

“They are in alignment with what I expected,” said industry analyst Patrick Moorhead with Austin-based Moor Insights and Strategy. “Any way you slice it, they had a good year and a good quarter.”

Moorhead praised AMD CEO Lisa Su, saying she has the company poised for a turnaround. 

“It’s all up to AMD to flawlessly execute this year,” he said. 

Advanced Micro Devices has been trying for years diversify its business given the overall decline in the PC business. AMD makes chips that provide computing and graphics power to computers, video game consoles and servers. Its customers include companies such as Dell, Apple, Sony and Microsoft. 

AMD is trying to gain market share against rivals Intel Corp. and Nvidia Corp.

Although formally headquartered in Sunnyvale, Calif., the chipmaker's senior executives mostly live and work in Austin. The company employs roughly 1,500 people in the Central Texas area.

When taking into account stock-based compensation and other accounting charges, AMD reported a loss of $8 million, or 1 cent per share, compared to $79 million a year ago. 

That beat analyst expectations of a loss of 2 cents a share. 

AMD also revealed that it hopes to launch sales of its new desktop processor based on the “Zen” architecture, called Ryzen, in early March. 

This new chip design is expected to help drive sales for AMD in 2017. 

The chipmaker is also going to release new Zen-based chip designs for graphics processors and servers in the second quarter, Su said in a conference call with analysts. 

Su said AMD has spent the past two years trying to strengthen the technical, operational and financial foundation of the company.

“We enter 2017 with strong revenue growth and margin expansion opportunities,” Su said. 

She said AMD’s new computer and graphics processors “can return AMD to the high-performance markets where we have not materially participated in recent years.”]

Over the past year, AMD shares have more than tripled in value as investor confidence grew over the struggling chipmaker’s ability to restore profitability. 

The last time the company reported an annual profit was 2014.

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