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AMD reports strong earnings thanks to PS4 and Xbox console sales

CEO Rory Reed expects the momentum to continue
Thu Jan 23 2014, 13:33
AMD Kaveri 4th gerneration APU chip

CHIP DESIGNER AMD has posted rather impressive financial results for the fourth quarter of 2013, exceeding its estimates thanks to strong sales of AMD powered Sony and Microsoft games consoles.

AMD reported revenues of $1.59bn, up 28 percent year over year and up nine percent from the third quarter.

The firm's operating income was $121m, compared to $79m in the third quarter and $22m in the fourth quarter of 2012, which it claims was due to increased revenue from semi-custom system on chip (SoC) sales.

"Strong execution of our strategic transformation plan drove significant revenue growth and improved profitability in the fourth quarter," said AMD CEO and president Rory Read.

"The continued ramp of our semi-custom SoCs and leadership graphics products resulted in a 38 percent revenue increase from the year ago quarter. Our focus in 2014 is to deliver revenue growth and profitability for the full year by leveraging our differentiated IP to drive success in our targeted new markets and core businesses."

Powered by AMD's semi-custom APUs, Microsoft's Xbox One and the Sony PS4 games consoles sold more than seven million units in less than two months, more than double the early sales of prior generation games consoles. Reed said that he expects this momentum to continue.

"We made good progress in our three step plan to restructure, accelerate and ultimately transform AMD," he added.

However, AMD's fourth quarter financial report showed that computing solutions segment revenue decreased nine percent compared to the previous quarter and fell 13 percent year over year. Reed said that these sequential and year over year revenue declines were primarily due to the flagging PC market.

AMD hopes it can change that with its newest APU. Earlier this month, AMD launched its long-awaited fourth generation Accelerated Processing Unit (APU) Kaveri, offering increased performance and power efficiency.

As the first series of APU chips based on AMD's heterogeneous system architecture (HSA), AMD's latest 28nm microprocessor has 2.41 billion transistors and is designed to target "multiple segments" of the information technology industry, covering desktops, notebooks, embedded systems and even servers, with a design power range scalable from 15W to 95W.

For the first quarter of 2014, AMD expects revenues to fall 16 percent plus or minus three percent sequentially. µ


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