AMD closes out its fiscal 2017 with another fully profitable quarter

AMD announced its fourth-quarter 2017 financial results and full-year 2017 financials this afternoon. On the way to another fully profitable quarter under GAAP, the company took in $1.48 billion in the fourth quarter of last year, up 34 percent year-over-year, and it posted operating income of $82 million, compared to a $3 million loss a year ago. The company's net income also stayed in the black with a $61 million result, compared to a net loss of $51 million a year ago. Gross margin was 35%, up three percentage points on the year.

  Q4 2017 Q4 2016 Change from Q3 2016
Revenue $1.48 billion $1.11 billion up 34%
Operating income $82 million -$3 million --
Net income $61 million -$51 million --
Gross margin 35% 32% up 3 percentage points

The company's Computing and Graphics business brought in $958 million in revenue, up 60% on the year. AMD attributed this performance to strong sales of Ryzen CPUs and Radeon graphics processors. The division brought in operating income of $85 million, compared to an operating loss of $21 million in the fourth quarter of 2016. Client CPU average selling prices were up from the year-ago quarter, as well, thanks to Ryzen CPUs.

The Enterprise, Embedded, and Semi-Custom business brought in $522 million, up three percent year-on-year, thanks to server-related sales. Operating income for the division was $19 million, down from $47 million a year ago, thanks to a one-time licensing payment to the company accounted for in the fourth quarter of 2016 and higher R&D costs. The company's All Other bucket leaked a $22 million operating loss, smaller than the $29 million loss recorded in the fourth quarter of 2016.

For its fiscal 2017, AMD posted $5.33 billion in revenue, up 25% year-on-year, thanks largely to the improved performance of the Computing and Graphics business. Operating income totaled $204 million for the year versus an operating loss of $372 million in AMD's fiscal 2016. Net income totaled $43 million, compared to a net loss of $497 million in the prior year. Gross margin rose 11 percentage points from 2016 to 34%, an improvement AMD attributes to the one-time $340 million it paid in 2016 as part of an amendment to its wafer supply agreement with GlobalFoundries. Net income of $43 million sealed in-the-black annual results for AMD and contrasts nicely with the company's $497 million net loss the year before. The company ended its 2017 with $1.18 billion in cash and cash equivalents, down from $1.26 billion a year ago.

For the first quarter of 2018, AMD expects $1.55 billion in revenue, plus or minus $50 million, which would be a 32% year-on-year increase. The company says that expectation comes from the triple threat of Ryzen, graphics, and Epyc products. The company isn't providing full-year guidance for its fiscal 2018 just yet.

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