AMD’s Computing and Graphics revenue of $958 million came out above the FactSet consensus estimate of $878.7 million, while the company’s Enterprise, Embedded and Semi-Custom business segment of $522 million came in below the consensus estimate of $529.9 million, according to StreetAccount.
The company said in a filing that it received a one-time tax credit of $18 million as a result of recently passed U.S. tax reform. Some other companies have had to pay one-time charges because of the tax changes. AMD expects a 10 percent tax rate on pre-tax income for all of 2018.
AMD has been busy dealing with fallout from the disclosure earlier this month of a security vulnerability called Spectre. AMD had said its chips were not affected by Spectre and another vulnerability, Meltdown, which has been shown to have an impact on several generations of chips from AMD rival Intel. But then, a few days later, AMD said the Spectre vulnerability does affect its chips.
In Tuesday’s filing AMD acknowledged the impact of the security issues on its business.
AMD’s efforts to prevent and address security vulnerabilities can be costly and may be partially effective or not successful at all. For instance, AMD’s mitigation efforts, including the deployment of software or firmware updates to address security vulnerabilities, could result in unintended consequences such as adverse performance system operation issues and reboots. AMD may also depend on third parties, such as customers, vendors and end users to deploy AMD’s mitigations or create their own, and they may delay, decline or modify the implementation of such mitigations. AMD’s relationships with its customers could be adversely affected as some of its customers may stop purchasing AMD products, reduce or delay future purchases of AMD products, or use competing products. Any of these actions by AMD’s customers could adversely affect its revenue. AMD is also subject to claims related to the recently disclosed side-channel exploits, such as “Spectre” and “Meltdown,” and may face claims or litigation for future vulnerabilities. Actual or perceived security vulnerabilities of AMD products may subject AMD to adverse publicity, damage to its brand and reputation, and could materially harm AMD’s business or financial results
And AMD CEO Lisa Su talked about the company’s next steps during the conference call.
“Longer-term, we have included changes in our future processor cores, starting with our ‘Zen2’ design, to further address potentialSpectre-like exploits,” Su said. But she said “there are no particular unusual expenses” that are related to the two security issues.