AMD Earnings Report, Q4 FY 2018: Closing On A Profitable 2018by Brett Howse on January 29, 2019 10:10 PM EST
AMD announced their fourth quarter earnings for their 2018 fiscal year today, and the company has continued its upward trajectory, with revenue gains of 6% year-over-year to $1.42 billion. Gross margin, which was long a burden for the company, is now right in the sweet spot at 38%, up 4% from a year ago. Operating income for the quarter was $28 million, compared to an operating loss of $2 million last year, and net income is now in the black as well at $38 million, compared to a net loss of $19 million a year ago. That resulted in earnings per share of $0.04, compared to a $0.02 loss per share in Q4 2017.
|AMD Q4 2018 Financial Results (GAAP)|
|Earnings Per Share||$0.04||$0.09||-$0.02|
Computing and Graphics has been the main contributor of AMD’s resurgence ever since AMD’s Ryzen CPU was launched, and revenue for this segment was up 8.6% to $986 million. Even more important, operating income for the segment was up 248% to $115 million. AMD sounds to have a busy year for 2019 which should be great news for its investors and customers.
|AMD Q4 2018 Computing and Graphics|
Enterprise, embedded, and semi-custom didn’t perform quite as well, with revenue more or less flat year-over-year at $433 million. AMD’s APU wins in both the Xbox and PlayStation have contributed a lot to this segment over the last couple of years, but the enterprise CPU space may be a bit tougher nut to crack than the consumer market, but the flat revenue is deceiving, since EPYC sales are offsetting lower semi-custom sales. AMD’s operating loss for this segment did improve though, with a $6 million loss this quarter compared to a $13 million loss a year ago, thanks to the higher margins in enterprise processors.
|AMD Q4 2018 Enterprise, Embedded, and Semi-Custom|
AMD’s All Other had a sizeable loss this quarter at $81 million, compared to a $22 million loss a year ago. AMD chalks this up to a $45 million charge related to older technology licenses.
Meanwhile, as Q4 is the final quarter of AMD's fiscal year, it means that AMD is reporting their overall performance for the year. Much like AMD's performance in their recent quarter, 2018 was a strong year for the company – bouyed in part by their best quarter in seven years – giving AMD it's first fully profitable year in quite some time.
|AMD FY 2018 Financial Results (GAAP)|
|Earnings Per Share||$0.32||-$0.03||-$0.60|
Overall the company came close to profitability in 2017, however on a GAAP basis, fell a bit short for the year. 2018 however had no such issues, with AMD booking a net income of $337 for the year. AMD has now been profitable for several quarters, marking a significant turnaround for a company that was previously losing hundreds of millions of dollars every year.
In addition to their earnings, AMD also announced a seventh amendment to their wafer agreement with Global Foundries, outlining costs for the next couple of years.
For Q1 2019, AMD expects revenue to be about $1.25 billion, plus or minus $50 million, which will be a 24% decrease over Q1 2018, due to the lack of cryptocurrency sales, but offset but CPU sales.
Source: AMD Investor Relations