Advanced Micro Devices Inc. (AMD, Financial) filed Quarterly Report for the period ended 2010-09-25.
Advanced Micro Devices Inc. has a market cap of $4.82 billion; its shares were traded at around $7.535 with a P/E ratio of 23.1 and P/S ratio of 0.9. AMD is in the portfolios of Daniel Loeb of Third Point, LLC, Bruce Kovner of Caxton Associates, Steven Cohen of SAC Capital Advisors, George Soros of Soros Fund Management LLC, Kenneth Fisher of Fisher Asset Management, LLC, Jeremy Grantham of GMO LLC.
Cash, cash equivalents and marketable securities as of September 25, 2010 was $1.7 billion. Long-term debt as of the end of the third quarter of 2010 decreased to $2.2 billion. During the third quarter of 2010, we repurchased $800 million aggregate principal amount of our 6.00% Convertible Senior Notes due 2015 (the 6.00% Notes) for $817 million in cash, which included payment of accrued interest and fees of $17 million. To fund this purchase, we used net proceeds of approximately $490 million from our issuance and sale of 7.75% Senior Notes due 2020 (the 7.75% Notes) completed in August 2010, along with existing cash of $327 million.
Computing Solutions operating income was $164 million in the third quarter of 2010 compared to $82 million in the third quarter of 2009. The improvement was primarily due to the increase in net revenue referenced above and a $47 million decrease in cost of sales, partially offset by a $66 million increase in research and development expenses and a $41 million increase in marketing, general and administrative expenses. Research and development expenses and marketing, general and administrative expenses increased for the reasons set forth under Expenses, below. Cost of sales decreased primarily due to reductions in manufacturing costs in the third quarter of 2010.
Computing Solutions operating income was $164 million in the third quarter of 2010 compared to $128 million in the second quarter of 2010. The improvement was primarily due to a $17 million decrease in cost of sales, a $15 million decrease in research and development expenses and the increase in net revenue referenced above. These improvements were partially offset by a $12 million increase in marketing, general and administrative expenses. Research and development expenses decreased and marketing, general and administrative expenses increased for the reasons set forth under Expenses, below. Cost of sales decreased primarily due to reductions in manufacturing costs in the third quarter of 2010.
All Other operating loss in the third quarter of 2010 was $37 million compared to an operating loss of $49 million in the third quarter of 2009. The improvement was primarily due to a $13 million decrease in cost of sales, an $8 million decrease in research and development expenses and an absence of $5 million in restructuring charges. The reduction in customer orders for Handheld products referenced above led to lower manufacturing costs and reduced cost of sales. Research and development expenses decreased for the reasons set forth under Expenses, below. The $19 million decrease in net revenue referenced above mitigated the improvement in operating results.
All Other operating loss in the first nine months of 2010 was $84 million compared to $214 million in the first nine months of 2009. The improvement in operating results was primarily attributable to an absence of $65 million in restructuring charges, a $60 million decrease in cost of sales, a $31 million decrease in research and development expenses and a $20 million decrease in marketing, general and administrative expenses. Cost of sales decreased primarily due to a one time benefit recognized in first quarter of 2010 related to deconsolidation of GF and lower Handheld product unit shipments. Research and development expenses and marketing, general and administrative expenses decreased for the reasons set forth under Expenses, below. The $53 million decrease in net revenue referenced above tempered the improvement in operating results.
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Advanced Micro Devices Inc. has a market cap of $4.82 billion; its shares were traded at around $7.535 with a P/E ratio of 23.1 and P/S ratio of 0.9. AMD is in the portfolios of Daniel Loeb of Third Point, LLC, Bruce Kovner of Caxton Associates, Steven Cohen of SAC Capital Advisors, George Soros of Soros Fund Management LLC, Kenneth Fisher of Fisher Asset Management, LLC, Jeremy Grantham of GMO LLC.
Highlight of Business Operations:
During the third quarter of 2010, in an environment of weaker-than-expected consumer notebook demand, we reported net revenue of $1.62 billion, a 16% increase compared to the third quarter of 2009 and a 2% decrease compared to the second quarter of 2010. In contrast to our expectations at the beginning of the third quarter, we experienced weaker than expected demand, particularly in the consumer notebook market in Western Europe and North America. However, despite the economic environment, we believe that our third quarter 2010 financial results demonstrate a number of important aspects of our fabless business model. Specifically, in a market where consumer notebook demand was weaker than expected, we improved our operating income, gross margin and non-GAAP adjusted free cash flow compared to the second quarter of 2010. Gross margin, as a percentage of net revenue, for the third quarter of 2010 was 46%, an increase of 1% from the second quarter of 2010 primarily due to product mix and ongoing improvements in cost management. Operating income of $128 million improved by $3 million compared to $125 million in the second quarter of 2010 primarily due to reduced operating expenses. For the nine months ended September 25, 2010, non-GAAP adjusted free cash flow, which we describe in more detail in the Financial Condition Liquidity section, was $344 million.Cash, cash equivalents and marketable securities as of September 25, 2010 was $1.7 billion. Long-term debt as of the end of the third quarter of 2010 decreased to $2.2 billion. During the third quarter of 2010, we repurchased $800 million aggregate principal amount of our 6.00% Convertible Senior Notes due 2015 (the 6.00% Notes) for $817 million in cash, which included payment of accrued interest and fees of $17 million. To fund this purchase, we used net proceeds of approximately $490 million from our issuance and sale of 7.75% Senior Notes due 2020 (the 7.75% Notes) completed in August 2010, along with existing cash of $327 million.
Computing Solutions operating income was $164 million in the third quarter of 2010 compared to $82 million in the third quarter of 2009. The improvement was primarily due to the increase in net revenue referenced above and a $47 million decrease in cost of sales, partially offset by a $66 million increase in research and development expenses and a $41 million increase in marketing, general and administrative expenses. Research and development expenses and marketing, general and administrative expenses increased for the reasons set forth under Expenses, below. Cost of sales decreased primarily due to reductions in manufacturing costs in the third quarter of 2010.
Computing Solutions operating income was $164 million in the third quarter of 2010 compared to $128 million in the second quarter of 2010. The improvement was primarily due to a $17 million decrease in cost of sales, a $15 million decrease in research and development expenses and the increase in net revenue referenced above. These improvements were partially offset by a $12 million increase in marketing, general and administrative expenses. Research and development expenses decreased and marketing, general and administrative expenses increased for the reasons set forth under Expenses, below. Cost of sales decreased primarily due to reductions in manufacturing costs in the third quarter of 2010.
All Other operating loss in the third quarter of 2010 was $37 million compared to an operating loss of $49 million in the third quarter of 2009. The improvement was primarily due to a $13 million decrease in cost of sales, an $8 million decrease in research and development expenses and an absence of $5 million in restructuring charges. The reduction in customer orders for Handheld products referenced above led to lower manufacturing costs and reduced cost of sales. Research and development expenses decreased for the reasons set forth under Expenses, below. The $19 million decrease in net revenue referenced above mitigated the improvement in operating results.
All Other operating loss in the first nine months of 2010 was $84 million compared to $214 million in the first nine months of 2009. The improvement in operating results was primarily attributable to an absence of $65 million in restructuring charges, a $60 million decrease in cost of sales, a $31 million decrease in research and development expenses and a $20 million decrease in marketing, general and administrative expenses. Cost of sales decreased primarily due to a one time benefit recognized in first quarter of 2010 related to deconsolidation of GF and lower Handheld product unit shipments. Research and development expenses and marketing, general and administrative expenses decreased for the reasons set forth under Expenses, below. The $53 million decrease in net revenue referenced above tempered the improvement in operating results.
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