Advanced Micro Devices, Inc. (NYSE: AMD) reported Q1 EPS of $0.02, $0.02 better than the analyst estimate of $0.00. Revenue for the quarter came in at $1.4 billion versus the consensus estimate of $1.34 billion.

For the second quarter of 2014, AMD expects revenue to increase 3 percent, plus or minus 3 percent, sequentially. The Street is currently at $1.36 billion.

Quarterly Financial Summary

• Gross margin was 35 percent in Q1 2014.
  • Gross margin was flat sequentially.
• Cash, cash equivalents and marketable securities, including long-term marketable securities, were $982 million at the end of the quarter, close to the optimal balance of $1 billion and well above the target minimum of $600 million.
  • In Q1 2014, AMD made the final $200 million cash payment to GLOBALFOUNDRIES related to the reduction of the "take or pay" wafer obligation commitments for 2012.
• Total debt, long-term and short-term, at the end of the quarter was $2.14 billion, up from $2.06 billion in Q4 2013.
  • During Q1 2014, AMD focused on re-profiling its near-term debt maturities. The company issued $600 million in aggregate principal value of 6.75% Senior Notes due 2019, utilizing proceeds to repurchase approximately $423 million aggregate principal amount of its 6.00% Convertible Senior Notes due 2015 and approximately $48 million aggregate principal amount of its 8.125% Senior Notes due 2017 during the quarter.
  • Additionally, AMD repurchased approximately $64 million aggregate principal amount of its 6.00% Convertible Senior Notes due 2015 in the open market utilizing cash balances in Q1 2014.
• Computing Solutions segment revenue decreased 8 percent sequentially and 12 percent year-over-year. The sequential and year-over-year declines were due to decreased client unit shipments.
  • Operating loss was $3 million, an improvement from an operating loss of $7 million in Q4 2013 and $39 million in Q1 2013 driven by lower operating expenses.
  • Microprocessor average selling price (ASP) was flat sequentially and decreased slightly year-over-year.
• Graphics and Visual Solutions segment revenue decreased 15 percent sequentially and increased 118 percent year-over-year driven largely by semi-custom SoCs. GPU revenue increased sequentially and year-over-year due to strong demand for the AMD Radeon" R7 and R9 family of products.
  • Operating income was $91 million compared with $121 million in Q4 2013 and $16 million in Q1 2013. The sequential decline was primarily due to decreased revenue from semi-custom SoCs while the year-over-year increase was driven by higher sales of semi-custom SoCs.
  • GPU ASP increased sequentially and year-over-year driven by the Radeon" R7 and R9 family of products.

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