As I have mentioned before, AMD is very loose with their financial reports and non GAAP numbers. And as the saying goes "where there is smoke there is fire". Here is another example:
In particular, Senior Analyst Hunter Gray found an unusual item in Advanced Micro Devices’ (AMD: $14/share) 10-K.
Like many firms, Advanced Micro Devices has non-operating expenses hidden in operating earnings. Non-operating expenses are unusual charges that don’t appear on the income statement because they are bundled in other line items. Without careful footnotes research, investors would never know that these non-recurring expenses distort GAAP numbers by lowering operating earnings.
In 2016, AMD took a $340 million (8% of reported revenue) charge related to a warrant agreement they entered into with West Coast Hitech L.P. This adjustment removes that non-operating expense and reduces AMD’s pre-tax operating loss by $340 million.
After all adjustments, AMD’s operating profit (NOPAT) in 2016 was -$124 million compared to GAAP net income of -$497 million. Without this adjustment one cannot get the true recurring profits of AMD’s business.