Scanning AMD's financial report for the first quarter of 2012, you would think the Sunnyvale chip maker is in big trouble. Revenue was $1.59 billion, a nice number if not for the fact that it represents a net loss of $590 million, or $0.80 cents per share, along with an operating loss of $580 million. That's a 6 percent sequential decrease and a 2 percent decrease year-over-year. Non-GAAP earnings were $0.12 a share. So why wouldn't investors want to hit the panic button?
For starters, AMD topped Wall Street's expectations. Wall Street was bracing itself for AMD to report non-GAAP earnings of $0.09 cents a share on revenue of $1.56 billion, so things didn't shake out as bad as they could have.
The other reason things aren't as bad as they seem is because the numbers include a $703 million charge AMD took when restructuring its business relationship with Globalfoundries last month, along with the acquisition of SeaMicro. All things considered, AMD believes it's standing on solid ground.
"AMD delivered solid results in the first quarter as we remain focused on improving our execution, delivering innovative products, and building a company around a strategy to deliver strong cash flow and earnings growth," said Rory Read, AMD president and CEO. "A complete top-to-bottom introduction of new APU offerings, combined with ample product supply resulting from continued progress with our manufacturing partners, positions us to win and grow."
Looking ahead, AMD expects revenue to increase 3 percent sequentially for the second quarter of 2012. There's also reason to be optimistic with the hard drive shortage starting to subside and Windows 8 on the horizon, both of which could drive up PC sales throughout 2012.