Lisa Su’s first week as the chief executive of AMD (NYSE: AMD) was not an easy one as the company faced “challenging market conditions” and a 2% year-over-year decrease in revenue.
The chipmaker posted third quarter revenue of $1.43 billion, an operating income of $63 million and net income of $17 million. Breaking down the earnings of AMD’s individual units, things get ugly quick. The company’s Computer and Graphics division — seen traditionally as the ‘bread and butter’ of the company — posted revenues of $781m, a 16 per cent year-on-year decline. The division posted an operating loss of $17 million which is more than the $6 million loss it posted in the previous quarter.
The Enterprise, Embedded, and Semi-Custom division, which AMD is putting faith in as the company’s new money maker, posted revenues of $648 million — up 21% from a year ago. The division posted earnings of $108 million, compared to last year’s earnings of $92 million.
But AMD also says the worst is yet to come. The company disclosed that it expects revenues to slide another 10 to 16 per cent in the next quarter, sequentially.
As such, the newly minted CEO Su ordered the company to engage in a restructuring plan (Bright Side of News* reported on this earlier in October) that will see global workforce reductions of 710 employees — or 7% of the company.
“While decisions that impact the size of our global team are never entered into lightly, this is the right step to ensure we prioritize our resources and engineering investments in our highest-priority opportunities that can drive improved profitability and long-term growth,” Su said in a statement regarding the layoffs.
AMD’s stock ended the Thursday trading day at $2.64. Friday’s trading day will likely when traders assess their confidence in Su’s plan to restructure the company.