Tomahawk, WI 10/21/2013 (BasicsMedia) – Advanced Micro Devices, Inc. (NYSE:AMD) reported its latest quarterly financial results for 2013. The reports are not very bad for a company whose market cap is $2.54 billion. When looking at the company’s latest financials, one also needs to compare them with those from last year, where AMD reported $1.11 billion in revenue and net loss of 9 cents per share. The results this year have been rather good, where AMD’s adjusted earnings were $4 cents per share, based on revenues of $1.46 billion. This return to profitability has impressed investors a great deal.

AMD Outperforms Analysts Expectations

AMD’s latest quarterly financial reports indicate that it outperformed analysts’ expectations. This was not enough to prevent AMD’s shares from tumbling since the release of the latest financial results. The company has lost about 6.85% in shares since the release of the current quarterly financial results. AMD announced that it expects a sequential increase in revenue by between 2% and 5%. More importantly is the fact that AMD returned to profitability, at least in this quarter, although no one can tell with accuracy how long this period will last.

AMD’s Strategic Transformation Plan Beginning to Bear Fruit

More than twelve months ago, AMD embarked on a path of strategic transformation plan. This plan has placed it on a steady path of growth and there is real possibility that it will continue doing so for quite some time. This plan, as was announced by AMD CEO, Rory Read, has helped the company to generate free cash flow, in addition to many other benefits. The semi-custom business remains the biggest earner of revenues for AMD. The company announced a sequential revenue growth of about 26% in this quarter, driven by the semi-custom business.

AMD’s Shift to High-Growth Markets Good for Long-Term Prospects

AMD plans to concentrate more on high-growth markets in the next two years. It hopes that this strategy will help it to improve its revenue by up to 50% thus leading to more profits. Investors love this sort of news, and it shows how clear the company is with the path it seeks to take in order to make the current profitability a more permanent feature of AMD, rather than a temporary success. AMD will achieve this by remaining true to its core business of developing industry-leading technology. AMD is being redefined in many aspects and this augurs well for it.

Cloud design is another area where I expect AMD to excel in going forward, and will be a major source of revenue as well. AMD is working on developing technology that will ease the process of morphing gaming consoles into ever-present TV consoles. Thus far, AMD has succeeded in convincing investors that it is not just focused on burning through cash. Its latest quarterly results show that it has successfully raised free cash flow. Investors are still unsure of AMD’s long-term profitability, and the company must work harder in order to prove them wrong.

It is good to see that AMD is less focused on PC sales seeing how this has been on a decline. As it diversifies its portfolio, this can only be good for its long-term prospects, which investors are not gung-ho over.

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