AMD Tuesday reported a loss of $177 million, or 24 cents per share, for the fourth quarter of 2011, a hefty decline from year-earlier profit of $375 million, or 50 cents a share.
AMD said the loss stemmed from a number of onetime charges, including investments in its partner and spin-off foundry business Globalfoundries.
The chip maker’s woes with its foundry business were alluded to in AMD's third-quarter earnings call in October 2011. AMD President and CEO Rory Read, however, said during Tuesday’s fourth-quarter call that foundry execution is starting to pick up again.
"2011 progress was tempered by execution challenges that impacted our supply. We took several steps during the course of the year to better manage our foundry partnerships," Read said during the call. "Over the last two quarters, 32nm yields and performance has steadily improved at Globalfoundries. As a result of the focus on improved execution, 32nm unit shipments increased by more than 80 percent from third quarter to fourth quarter and now represent a full third of our overall processor mix."
AMD’s fourth-quarter revenue of $1.69 billion reflected a 2 percent jump from the $1.65 billion it reported in the fourth quarter of 2010. Annual revenue of $6.57 billion for 2011 was also up slightly from $6.49 billion in 2010.
This modest increase stemmed largely from AMD’s Computing Solutions segment, which grew its revenue 2 percent sequentially and 7 percent year-over-year. Server and chipset revenue, increased global sales of its APU series of processors, and a rise in the number of AMD mobile processors being used in notebooks from OEMs including Dell, Lenovo and Hewlett-Packard all contributed to the segment’s success.
"AMD shipped more than 30 million APUs in 2011, resulting in record annual notebook revenue," said Read in a statement. "The unmatched combination of computing and graphics capabilities in our low-power Brazos platform has made it our fastest ramping platform ever, paving the way for continued growth in key segments and geographies. Our server business has regained momentum, delivering two consecutive quarters of strong sequential growth."
AMD’s graphics segment, however, decreased 5 percent sequentially and 10 percent year-over-year. The company attributed the drop to a decline in mobile GPU shipments and pointed to manufacturing issues at Globalfoundires.
"Revenue was impacted by lower-than-expected GPU demand and a onetime issue that limited supply of the 45nm desktop processors," Read said. "Working closely with our strategic foundry partner, we believe the 45nm issues have been corrected and we will see supplies rebound in the first quarter."
AMD’s outlook for 2012 suggests the company is still working to revitalize GPU sales and recover from the $177 million loss. The company said it expects revenue to decrease 8 percent, plus or minus 3 percent, sequentially for the first quarter of 2012.
"We made good progress, but no question, we have more work to do," Read said.