AMD announced their second quarter earnings for the 2019 fiscal year, and the company’s revenue was $1.53 billion for the quarter. This is down 13% from the same quarter last year. Gross margin improved from 37% to 41% year-over-year. Operating income was $59 million, down from $153 million a year ago, and net income was down $81 million to $35 million. This resulted in earnings-per-share of $0.03.

AMD Q2 2019 Financial Results (GAAP)
  Q2'2019 Q1'2019 Q2'2018
Revenue $1531M $1272M $1756M
Gross Margin 41% 41% 37%
Operating Income $59M $38M $153M
Net Income $35M $16M $116M
Earnings Per Share $0.03 $0.01 $0.12

Although AMD was in the black for yet another quarter, this is certainly a dip that AMD does not expect to last. Their forecast for Q3 2019 is a 9% year-over-year increase in revenue to $1.8 billion, and they’ve recently launched new products that could help them achieve those goals.

AMD Q2 2019 Computing and Graphics
  Q2'2019 Q1'2019 Q2'2018
Revenue $940M $831M $1086M
Operating Income $22M $16M $117M

Looking back at Q2 though, Computing and Graphics revenue was down 13% to $940 million, and AMD attributes this drop to lower graphics channel sales. This drop was slightly offset though by higher client CPU and datacenter GPU sales. Also good for AMD and their investors is that their average selling price for client processors has increased thanks to more Ryzen sales, and GPU average selling price has also increased thanks to datacenter GPU sales. The Computing and Graphics segment had an operating income of $22 million for the quarter, compared to $117 million a year ago.

AMD Q2 2019 Enterprise, Embedded and Semi-Custom
  Q2'2019 Q1'2019 Q2'2018
Revenue $591M $441M $670M
Operating Income $89M $68M $69M

AMD’s other major segment is their Enterprise, Embedded, and Semi-Custom, and this product group also saw revenues fall 12% to $591 million for the quarter. AMD attributes this drop to lower semi-custom product revenue, which you can more or less read as console sales, and that makes sense since the current generation consoles are reaching the end of their life, but both Microsoft and Sony have both committed to AMD platforms for their next generation consoles, so expect this segment’s fortunes to get a bit better soon. Operating income was $89 million for this group, which was up from $69 million last year. The higher operating income is thanks to higher EPYC processor sales, which is also a great sign for this segment.

Although this quarter’s revenue certainly saw a dip, AMD did just launch their latest third generation Ryzen this month, which wouldn’t be reported in their Q2 earnings which ended June 29th. As we saw in our review, this is a great step forward for AMD’s processor designs, and they have also launched their Navi based GPUs in July, so it makes some sense to see a dip prior to a major product launch. We’ll keep our eye on their results for Q3, but as previously mentioned they are expecting this to be a short-term drop, and with their new product lineup, that seems like a safe bet.

Source: AMD Investor Relations

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  • trivik12 - Friday, August 2, 2019 - link

    That is bullshit. Intel makes custom chips for Google. That relationship is very strong. They were also early access for Optane memory.

    Google/Facebook/Amazon all will also make their own SOC/ASIC etc. Still majority of servers/cloud will run on Intel for sure
    Reply
  • goatfajitas - Wednesday, July 31, 2019 - link

    Agreed, but DIY and HEDT is a tiny peice. That is what I was saying. AMD does have plans in the other markets and OEM wins as well... Next year we will see 7nm laptop chips that will help. With that said AMD will not likely ever dominate. They can however be very healthy and competitive if they keep executing. Reply
  • HStewart - Saturday, August 3, 2019 - link

    DIY PC's is a dyeing market - with very limited appeal. I better attitude for AMD would be support it fan based instead trying to disrupt the completion. Such a negative attitude makes customers like myself don't desire or trust them. Honest Truth. Reply
  • Korguz - Tuesday, August 6, 2019 - link

    maybe where you are.. but i have my doubts its dying as much as you claim., if it was, then there wouldnt be so many boards, or cpu's released as there is.

    heh.. more like your blind fanaticism towards intel is why you dont desire or trust them, HStewart.
    Reply
  • bobhumplick - Wednesday, July 31, 2019 - link

    it made intels old lineup irrelevant. but intels old lineup is...well old. if they release cometlake with an 8 core 16 thread i7 instead of i9 and an 8 core 8 thread i5 (the old i7) they basically become very relevant again. things change year to year and sometimes month to month. when amd gets a win everybody declares the death of intel. and then a couple months later when intel comes out with something better nobody has anything say then. just like how an 8700k clocked to 5ghz even beat amds 8 cores from the first gen, even in multithreaded apps. itll go back and forth between them. intel really need to get on to 10nm for desktop but they can compete on 14nm for a bit longer Reply
  • jabber - Thursday, August 1, 2019 - link

    Folks on PC enthusiasts just see things from their perspective.

    Form the perspective of the CTO of Ford/GM/Pfizer/Google/Bank of America...they will be buying those Dell or HP desktops with Intel inside in the millions.

    Your valiant purchase of a 3000 series was cute but it wont change a thing.
    Reply
  • Xyler94 - Tuesday, August 6, 2019 - link

    Ford and them don't give 2 flying fucks what CPU is in the machine. They care if Dell can supply them with a machine, it just happens to be powered by Intel.

    The problem isn't that AMD's CPUs aren't what people are after, it's that big builders like Dell aren't selling them.
    Reply
  • yeeeeman - Wednesday, July 31, 2019 - link

    AMD needs to keep executing like this for a few more years before they can gain momentum and increase their revenues. Reply
  • CiccioB - Wednesday, July 31, 2019 - link

    Problem is that this kind of advantages it is enjoying now, that is the issues Intel has had with its 10nm, is probably not going to repeat in the future.
    Next year with this product and Intel in its full power is not going to provide more money than today.
    Reply
  • eva02langley - Wednesday, July 31, 2019 - link

    The thing is Intel was always having the process node advantage, now it is gone for good. It will never happen again. TSMC is already rolling out EUV 7nm, 5nm and 3nm is on track. Intel will never get this back. Reply

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