AMD finishes its first year of profitability since 2011 on improvements in the PC market. That is truly an accomplishment where analysts should be saying, "it's about time".
To begin the investor call, Lisa Su harkened back 3 years to her debut as AMD's Chief Executive Officer. AMD was to become a "high-performance computing leader through great products, deep customer relationships, and a simplified and focused business strategy". She correctly points out that AMD's $1.48 billion in revenue is a 34% increase year-over-year. She also notes that the company increased its annual revenue by $1 billion, increased gross margins, and delivered a profitable fiscal 2017.
MarketWatch called 2017 "Stunning", although they followed with warnings about AMD's past record of financial relapses. Reuters provided a more measured, numbers-based perspective noting that revenues rose for the year due primarily on the strength of GPU sales. OC3D went over the top talking of AMD's impressive financial results and calling 2017 a remarkable year for AMD.
AMD has some great products, no doubt. Deep customer relationships is wishy-washy blah-blah. A simplified and focused business strategy is subjective. The company is clearly not a leader in any of their market. They lag competitors in every category of leadership.
NVIDIA has a quarterly revenue rate that is more than $1 billion per quarter higher than AMD and they achieve this on a GPU business. Intel is clearly the gorilla in the market, none the less, Intel recorded annual revenues 11 times those of AMD. Both NVIDIA and Intel enjoy gross margins that are nearly double the gross margin rate of AMD. In the third year of CEO Su's "turn-around", the company records a modest profit and $0.08 non-GAAP EPS. In a year when AMD's main rivals are posting record results, it's about time.
The PW Perspective
CEO Su has ended her 3rd year at the helm of AMD with a positive result. That already bests her predecessor, Rory Read. If we assume that AMD is able to turn their new technology products into sustainable sales with improved gross margins, then AMD shareholders and employees may finally enjoy an AMD that is not a year-in and year-out roller-coaster ride.
