PRO­CES­SORS BOOST AMD’S SALES AND PROF­ITS

Austin American-Statesman - - FRONT PAGE - By Se­bas­tian Her­rera sher­rera@states­man.com

Chip­maker Ad­vanced Mi­cro De­vices on Tues­day an­nounced earn­ings that beat Wall Street ex­pec­ta­tions as the com­pany re­ported 34 per­cent year-overyear rev­enue growth that was boosted by de­mand for its com­puter pro­ces­sors.

AMD re­ported $1.48 bil­lion in sales and a profit of $61 mil­lion, or 6 cents per share for its fourth quar­ter.

An­a­lysts polled by Zacks in­vest­ment re­search had pre­dicted earn­ings of 5 cents per share and $1.41 bil­lion in sales.

The com­pany also re­ported its 2017 full-year fi­nan­cial data. Its rev­enue was $5.33 bil­lion, $610 mil­lion more than its 2016 fis­cal year, and it had a profit of $43 mil­lion, or 4 cents per share, com­pared with a $497 mil­lion loss in 2016.

AMD is head­quar­tered in Cal­i­for­nia but has most of its se­nior man­age­ment team based in Austin and em­ploys about 1,500 peo­ple in Cen­tral Texas.

The com­pany has been mak­ing gains after some years of un­der­per­form­ing.

In­dus­try an­a­lysts have said AMD is ben­e­fit­ing from de­mand for its graphic processor unit, which has wide­spread use now in the gam­ing, au­to­mo­tive and blockchain in­dus­tries.

The com­pany also got a boost in 2017 from the launch of its Ryzen processor chips.

The past year “marked a key in­flec­tion point for AMD as we re-shaped our prod­uct port­fo­lio, de­liv­ered 25 per­cent an­nual rev­enue growth, ex­panded gross mar­gin and achieved full-year prof­itabil­ity,” AMD CEO Lisa Su said in a writ­ten state­ment. “We are even more ex­cited about 2018 as we launch our next wave of high-per­for­mance prod­ucts and con­tinue to po­si­tion AMD as one of the pre­mier long-term growth com­pa­nies in the tech­nol­ogy in­dus­try.”

A year ago, AMD had re­ported $1.1 bil­lion in sales and a net loss of $51 mil­lion.

After mul­ti­ple quar­ters of losses, AMD posted a profit dur­ing its third fis­cal quar­ter in 2017.

At the same time, some an­a­lysts have cau­tioned that AMD’s stock, which has risen more than 400 per­cent since 2016, could be at a premium now and set to drop.

AMD is also still re­spond­ing to a se­cu­rity flaw in its chips that was un­veiled by re­searchers ear­lier this month.

AMD said this month that one of the two flaws found, named

Spec­tre, was ap­pli­ca­ble to its chips, and that the com­pany was work­ing on fixes. Any ef­fects of the se­cu­rity flaw on AMD sales won’t be known un­til its next quar­terly re­port.

In a state­ment Tues­day, AMD said its ef­forts to pre­vent and ad­dress se­cu­rity flaws could be costly and could lead to other is­sues.

“For in­stance, AMD’s mit­i­ga­tion ef­forts, in­clud­ing the de­ploy­ment of soft­ware or firmware up­dates to ad­dress se­cu­rity vul­ner­a­bil­i­ties, could re­sult in un­in­tended con­se­quences such as ad­verse per­for­mance sys­tem op­er­a­tion is­sues and re­boots,” the com­pany said.

AMD’s stock closed 3.38 per­cent lower on Tues­day at $12.87 per share. Its shares were ini­tially trad­ing at about 5 per­cent lower in after-hours trad­ing.

An­a­lysts ex­pect growth for AMD as de­mand for its new chips in com­put­ing, graph­ics and vi­su­al­iza­tion con­tin­ues.

An­a­lysts at Zacks have said they ex­pect the com­pany to see $0.13 per­cent earn­ings growth dur­ing the next five years.

AMD’s stock closed Tues­day at $12.87 per share.

RALPH BARRERA / AMER­I­CAN-STATES­MAN

“We are even more ex­cited about 2018 as we launch our next wave of ... prod­ucts,” said AMD CEO Lisa Su.

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