Advanced Micro Devices (AMD) Q1 2012 Earnings Call April 19, 2012 5:00 pm ET Executives Ruth Cotter - Director Rory P. Read - Chief Executive Officer, President, Interim Chief Sales Officer and Member of The Board of Directors Thomas Seifert - Chief Financial officer, Principal Accounting officer and Senior Vice President Analysts Sanjay Chaurasia - Nomura Securities Co. Ltd., Research Division Uche X. Orji - UBS Investment Bank, Research Division Patrick Walsh Glen Yeung - Citigroup Inc, Research Division Stacy A. Rasgon - Sanford C. Bernstein & Co., LLC., Research Division JoAnne Feeney - Longbow Research LLC Christopher Caso - Susquehanna Financial Group, LLLP, Research Division Mark Lipacis - Jefferies & Company, Inc., Research Division Cody G. Acree - Williams Financial Group, Inc., Research Division David M. Wong - Wells Fargo Securities, LLC, Research Division Hans C. Mosesmann - Raymond James & Associates, Inc., Research Division Patrick Wang - Evercore Partners Inc., Research Division Dean Grumlose - Stifel, Nicolaus & Co., Inc., Research Division Presentation Operator
Previous Statements by AMD
» Advanced Micro Devices, Inc. - Special Call
» Advanced Micro Devices, Inc. - Analyst/Investor Day
» Advanced Micro Devices' CEO Discusses Q4 2011 Results - Earnings Call Transcript
The participants on our call today are Rory Read, President and Chief Executive Officer; and Thomas Seifert, our Senior Vice President and Chief Financial Officer of AMD. This is a live call and it will be replayed via webcast on amd.com. The replay will be available for the next 10 days starting later this evening.Before we begin today, I'd like to highlight a few dates of interest for you. Mark Papermaster, our Senior Vice President and Chief Technology Officer, will present at the Jefferies Global Media and Telecom Conference on May 7 in New York. Thomas Seifert will present at the Bank of America Merrill Lynch Technology Conference in San Francisco on the 8th of May. Rory Read will present at the JPMorgan Technology, Media and Telecom Conference in Boston on May 15. And our second quarter quiet time will begin the close of business on Friday, June 15. Lastly, we intend to announce our second quarter earnings on July 19. As a result of the 2012 amendment to the Wafer Supply Agreement with GLOBALFOUNDRIES, as of March 5, 2012, AMD no longer has equity ownership in GLOBALFOUNDRIES. I'd like to take this opportunity to remind everyone that today's discussion contains forward-looking statements based on the environment as we currently see it. Those statements are based on current beliefs, assumptions and expectations, speak only as of the current date, and as such, includes risks and uncertainties that could cause actual results to differ materially from our current expectations. Please refer to our press release for more information on the specific risk factors that could cause actual results to differ materially from our current expectations. You'll also find detailed discussions about such risk factors in our filings with the SEC, and in particular, AMD's annual report on Form 10-K for the year ended December 31, 2011. Finally, any non-GAAP financial measures or references on this call are reconciled in the CFO-written commentary posted on our website.
Now with that, I'd like to hand the call over to Rory. Rory?Rory P. Read Thank you, Ruth. Q1 was a solid quarter for AMD. We made good progress improving our execution, becoming more consistent and building trust with our customers and partners. We have taken steps to position the company to seize the opportunities in front of us, both in the high-growth markets and in the product categories, where our innovative technology provides us with leadership opportunities. Our improved execution resulted in better-than-expected revenue of $1.59 billion for the seasonally down first quarter, a 6% sequential decrease and a 2% decrease year-over-year. First quarter non-GAAP income was $92 million. This is a 64% improvement from the year-ago period, which was driven by gross margin improvements resulting from a richer product mix and operational efficiencies. A steady supply of 32-nanometer products allowed us to meet our customer commitment in the quarter. Consistent execution that builds trust with our customers remains the fundamental part of our near-term growth strategy. We are also pleased with our 28-nanometer graphics product ramp. We met our new product introduction commitments in the quarter and we are now the only company offering a top-to-bottom family of 28-nanometer discrete desktop GPU offerings. Customer demand for these industry-leading graphic products is strong. Adoption of our APUs continues to accelerate. APUs account for nearly 100% of our mobile unit shipments in the quarter, helping drive an approximate 30% increase in mobile processor unit shipments and significant mobile revenue growth from a year ago. We saw a strong success in the critical 400 to 700 mainstream retail notebook price band, which accounts for nearly 50% of all notebooks sold in retail in 2011. For example, the best-selling premium notebook SKU of the first quarter at Best Buy was in fact powered by our AMD AA APU.
Our next-generation Trinity APU for mainstream notebook extends our leadership opportunity in this large and growing price band. Trinity improves on virtually every aspect of our current A-Series APUs while doubling the performance per watt. By integrating a discrete level GPU into the die, Trinity enables outstanding video and gaming experiences with superior battery life. Trinity is a great value, excelling at running the types of software increasingly used by our consumers buying these mainstream notebooks. We are successfully ramping production of Trinity APUs as customers prepared to launch a record number of AMD notebook designs beginning this quarter.Read the rest of this transcript for free on seekingalpha.com