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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  • nandnandnand - Wednesday, July 31, 2019 - link

    I can currently find Ryzen 7 3750H, the top AMD mobile chip, in ~$700 systems. They seem to have discrete GPUs, but I wouldn't call them gaming laptops per se. $700 is the price point I would want to pay for laptop to use for the next several years (and I like to use them right through their destruction). You can find decent ~$300-$400 laptops, but the best chip out of the lineup at $700 works and gives some future proofing.

    I would be pleasantly surprised if the VCE supports AV1.

    https://slickdeals.net/newsearch.php?src=SearchBar...
    Reply
  • just4U - Saturday, August 3, 2019 - link

    I dunno.. you ask me this is a pretty damn good gaming laptop with Ryzen 3750..

    https://www.newegg.com/gold-steel-asus-tuf-gaming-...

    News was amd was getting a push into the laptop market and this appears to be the start of it. Good graphics, keyboard, panel.. Sure it might be a 1660TI but it's still a Ryzen onboard.
    Reply
  • RSAUser - Thursday, August 1, 2019 - link

    AMD's chips in mobile are currently not very power efficient, and they will still be using the older architecture and 14nm node until 4000 series at the very earliest.

    They are not competitive in mobile.
    Reply
  • ET - Wednesday, July 31, 2019 - link

    That's not how much AMD makes, that's how much is left after expenses. It's pretty reasonable for a company that's heavily into R&D to spend a lot on that, and this sum probably also includes paying off debts, etc. I'd say that in general, a company that invests most of its money in its future is a healthy company. I think that it's better to look at the revenue and gross margin. That tells you how well AMD is doing, not the net income. Though AMD certainly has its work cut for it there. It's way under Intel and still under NVIDIA, though it's close enough to NVIDIA to hopefully surpass it at some point. Reply
  • CiccioB - Wednesday, July 31, 2019 - link

    "It's pretty reasonable for a company that's heavily into R&D to spend a lot on that, and this sum probably also includes paying off debts, etc"
    AMD's rivals have the same issues but they solve them and stil they have a lot of money left at the end of the sums. AMD is winning on the market (share) just because they sell at a discount price with respect to its rivals.
    Should they apply the same margins others do they will be just have much less "success" despite their good momentum.
    Reply
  • willis936 - Wednesday, July 31, 2019 - link

    You think AMD rivals have done anything other than slash R&D expenses over the last decade? Reply
  • CiccioB - Wednesday, July 31, 2019 - link

    Huh?
    AMD rivals have made lots of money up to now.
    What do yo mean with "slash R&D"?
    What do you think stock companies intents are?
    Reply
  • willis936 - Wednesday, July 31, 2019 - link

    Read my comment again. Reply
  • Sahrin - Wednesday, July 31, 2019 - link

    As a share of revenue, AMD spends 16% more on R&D than Intel does.

    This is the reason for the discrepancy. If AMD spent as little as Intel, they would have fully ~$196M more in profit than Intel.

    Remember also that Intel is engaged in more 'exploratory" markets, and a much higher share of their spending goes to 'waste' - things like paying for compiler cheats, etc. These benefit *relative* performance v. the competition, but they aren't actual gains in equity - just burning cash for market share.
    Reply
  • CiccioB - Wednesday, July 31, 2019 - link

    This argument should been seen reversed.
    Seen the margin applied, AMD just has a discount price of 16% with respect to Intel.
    This low margin is the responsible to the fact that AMD has few money to invest in R&D to create better products.
    If they would place their product with the same margins they would loose all the advantages they are enjoying now. Seen that Intel is not going to stay at this performance level (4 years old) forever, AMD has to improve its product a lot to keep the pace Intel will set when completing its 7nm PP with all the kind of connections they can use (and AMD not).
    Reply

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