AMD's revenue drops 2% in 2013, but shows income and gross margin improvements

By on January 22, 2014, 3:30 PM
amd, xbox, net, ps4, income, gross margin

AMD's fourth quarter and yearly 2013 financial numbers have now been released, pointing at a general improvement over previous years. Although the company's revenue dropped by 2%, its gross margin and operating income are up quite significantly over the previous year.

The company posted $83 million in net income losses, which is actually a vast improvement over its $1.18 billion loss in 2012. Both a rise in gross margin by 14% and a booming Graphics and Visual Solutions group are likely the reasons the company is closing the losses gap. While the Computing Solutions group suffered a 22% dip last year in revenue, the Graphics and Visual Solutions group (responsible for PS4 and Xbox One chips) posted a 55% hike in revenue from $1.4 to $2.2 billion in 2012. AMD CEO Rory Read attributes the company's strong Q4 2013 results to the console SoCs and its other leading graphics solutions.

And a strong fourth quarter it was, the company posted $89 million in profit as well as improvements across the board including better income, revenue and gross margin numbers.

As for projections, the company sees revenue dropping about 16% sequentially (give or take 3%) in the first quarter of 2014. AMD locked in about $1.1 billion in revenue during Q1 2013, so even a significant dip of around 18 or 19% would still leave the company on top of last year's Q1 numbers.




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cliffordcooley cliffordcooley, TechSpot Paladin, said:

With the release of XBox One and PS4, I wonder why anyone would think sales should be worse?

GeforcerFX GeforcerFX said:

With the release of XBox One and PS4, I wonder why anyone would think sales should be worse?

not very high profit per chip, and there's only been like 2-3 million of those consoles made.

But... they are becoming more popular on laptops because of there pricing, and I am seeing them in more OEM systems, even with the drop in PC sales as long as there getting a larger chunk of the shrinking pie there still doing better. But they are again behind, intel made massive leaps into the tablet market this year. I still have yet to see a good AMD tablet made by a big brand (though I could have missed it), they need to push into tablets now or they will lose out.

Vrmithrax Vrmithrax, TechSpot Paladin, said:

I'm surprised more "casual gamers" aren't grabbing AMD APU powered units with a discrete GPU. Last summer I got my son an A10-4600M based system with HD 7670M graphics board, and he's got it running in hybrid crossfire mode... He can easily play recent games at the laptop's native resolution, with medium or better detail. And it has pretty decent battery life, which surprised me.

Seems like AMD could carve out a pretty good sized "mediocre gaming" niche with laptops running similar processor setups, if they could get more manufacturers on board and target some advertising... All of the boutique gaming machine builders cater to the hardcore bleeding edge maximum FPS crowd, and the excessive prices usually scare off all but the die-hard (or wealthy). But there's so many potential consumers out there who'd like to just have decent mobile-friendly gaming at decent prices.

cliffordcooley cliffordcooley, TechSpot Paladin, said:

not very high profit per chip, and there's only been like 2-3 million of those consoles made.
Perhaps you could explain why the following quot doesn't seem to match your quot.

AMD CEO Rory Read attributes the company's strong Q4 2013 results to the console SoCs and its other leading graphics solutions.

Raoul Duke Raoul Duke said:

With the miners buying every high-end videocard they can make it surely must help. Maybe it is not true, but I read somewhere the high-end cards had the highest markup. Maybe it is retailers that are getting it though. Still moving a lot of cards though

dividebyzero dividebyzero, trainee n00b, said:

Seems like AMD could carve out a pretty good sized "mediocre gaming" niche with laptops running similar processor setups, if they could get more manufacturers on board and target some advertising...

AMD have never really had that much rapport with OEMs, mainly because like advertising and software, they have always deemed it a secondary (if that) priority. Probably stems from Jerry Sanders original ethos that the product can sell itself with some personal schmoozing from the CEO- which was ok when AMD could boast "military spec" components (for what that was worth) and they had a silver-tongued salesman heading the company.

All of the boutique gaming machine builders cater to the hardcore bleeding edge maximum FPS crowd, and the excessive prices usually scare off all but the die-hard (or wealthy). But there's so many potential consumers out there who'd like to just have decent mobile-friendly gaming at decent prices.

It will take time and a lot of energy to rebuild the lost trust from the Enduro fiasco. When OEMs are left high-and-dry on the driver front and have an angry customer base with metaphorical flaming torches and pitchforks storming the Support/Warranty forums, there needs to be some passage of time for things to cool down as well as a consistent driver release cycle to rebuild the image.

cliffordcooley cliffordcooley, TechSpot Paladin, said:

Enduro fiasco??

1 person liked this | GhostRyder GhostRyder said:

Enduro fiasco??

AMD Claim:

[link]

Problems Claim:

[link]

It was a tech with their notebooks that caused a problem with the 7970m in short (well that was the bigger flag at least). Theres a lot more to it than that @cliffordcooley but that should at least give you a general idea. Its dead at this point and been replaced honestly as it was during the 12.XX Series of Catalyst Drivers.

1 person liked this | dividebyzero dividebyzero, trainee n00b, said:

Enduro fiasco??

GPU underutilization mainly (but also a panoply of BSOD issues). Enduro (mobile drivers and hybrid graphics in particular) was never really fixed in any timely manner. First, as is usual, a user base hitting the forums, followed by the mainstream tech media asking the question loudly enough to get AMD's attention...followed by a protracted and problematic release schedule. The fact that AMD started censoring forums because of the negative press impacting the brand gives an idea of how widespread the problem became:

It was a tech with their notebooks that caused a problem with the 7970m in short (well that was the bigger flag at least)

The 7970M was the highest profile (due to being the flagship part and the most problematic to fix), but as the Anandtech article I linked to shows, the problem was originally across the board. To this day there are still issues with compatibility of components- something that could have been alleviated by some transparency from AMD regarding architectures.

cliffordcooley cliffordcooley, TechSpot Paladin, said:

@GhostRyder & @dividebyzero thanks for the clarification. I didn't know anything about the driver issue. I wasn't sure which direction DBZ was headed.

1 person liked this | GhostRyder GhostRyder said:

@GhostRyder & @dividebyzero thanks for the clarification. I didn't know anything about the driver issue. I wasn't sure which direction DBZ was headed.

No prob, it honestly was more along the lines of utilization on the upper end (Mobile mostly) GPU's (Mostly 7970m's because there were not as many 7950m's) where games were underperforming and only utilizing maybe 1/2-3/4 the GPU's true power. It mostly became known as a wide spread thing because AMD tried to quiet people while fixing it during the time frame when they were still taking a month or so to release Driver updates. It was fixed, but it still happened which was just one of those things.

The 7970M was the highest profile (due to being the flagship part and the most problematic to fix), but as the Anandtech article I linked to shows, the problem was originally across the board. To this day there are still issues with compatibility of components- something that could have been alleviated by some transparency from AMD regarding architectures.

Hence why I said it was the bigger flag because it showed the most. The 7870m and below did not showcase it as much due to the levels of differences being much smaller because they were not as powerful. The HD 7950's were just kinda rare to begin with (I can't actually think of anyone other than Sager that had the option) so you did not hear as much from those owners. Since people were buying the 7970m single or Dual and wanting the pinnacle of power but got mediocre returns you got a louder voice.

1 person liked this | dividebyzero dividebyzero, trainee n00b, said:

@GhostRyder & @dividebyzero thanks for the clarification. I didn't know anything about the driver issue. I wasn't sure which direction DBZ was headed.

The issue is mostly solved. Partly through driver updates, and partly through components becoming obsolete.

While the issue is largely put to rest from a solution point of view, the fact that OEMs were left to shoulder the burden, along with needing a considerable groundswell from media sites to get AMD motivated to work on a fix definitely worked against AMD in OEM business relations- which probably accounted for the large dip in mobile GPU shipments during the first half of 2012.

Like any business, it's easy to lose a market but substantially harder to win it back.

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