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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  • webdoctors - Wednesday, July 31, 2019 - link

    $35M? It's weird, AMD is a global company making highly complicated cutting edge tech that's used everywhere, kicking Intel's butt in desktop segment and they only made $35M the last quarter? Sure its better than a loss but still.

    It's crazy a movie or music star made more money than this global company of 10K employees. Ppl can't accuse them of rolling in dough haha.
  • imaheadcase - Wednesday, July 31, 2019 - link

    No one has accused them of rolling in the dough. Not sure why you think they are beating intel butt in desktop do know just because they have a new chip out doesn't automatically mean instant win? Lots of people have contracts with intel, prefer intel chips. Intel still rules in the SFF market and high end gaming.
  • AshlayW - Wednesday, July 31, 2019 - link

    Erm, no. Ryzen 3000 essentially made Intel's entire lineup, except for MAYBE 9900K, completely pointless at their current prices. You can put a 3900X in mini ITX X470, and later an 3950X. SFF is covered lol. 3900X gives 9900K a run for its money in "high end gaming" So much so you would be hard pressed to notice the difference, does it vastly more efficiently, and oblierates in other tasks: while costing the same and including a cooler capable of sustaining impressive boost clocks. You also get a platform that isn't dead, and if you go with X570, new features that Intel doesn't even support.

    People who "prefer Intel chips" as you put it, are tools with Ryzen 3000 on the market. If you can't see the butt getting kicked, you are blind, sorry. Even my 2700X makes half the Intel lineup pointless.
  • heffeque - Wednesday, July 31, 2019 - link

    Probably will have to ask for a new server on one of the projects I manage. Purchasing Dept will surely get me Intel.
    I'm happy that you know that AMD has the better price/performance out there, but I'm guessing that you are on your teens if you think that that will instantly make everyone buy AMD.
    You also seem to forget that AMD still sucks in laptop CPUs and that most people nowadays buy laptops.
    Wish things were as easy as you see them.
  • R0H1T - Thursday, August 1, 2019 - link

    >You also seem to forget that AMD still sucks in laptop CPUs and that most people nowadays buy laptops.

    You either haven't seen the reviews of Ryzen 2xxx U/H & 3xxx U/H series or basically made this up just to make your point! AMD lags in the single core dept for sure however they more than make up for it in the graphics department, the only (major) problem for them is the core count & probably not producing enough chips. If however they do have the capacity for more production, then I can only assume Intel is back to their old ways of <you know what> like we saw recently with that user "benchmark" tweak 😑
  • Gondalf - Wednesday, July 31, 2019 - link

    Not even Charlie of Semiaccurate is unfair like you.
    After an analysis of 3000 serie (leaving away expensive low volume 3900 and 3950 cpus), he said that at the end it is only a matter of selling price, and on per core basis the two cpus are comparable.
    Bel intel will lower the prices at an AMD level soon.
  • goatfajitas - Wednesday, July 31, 2019 - link

    Yes, Ryzen is great and if I were building today I would definitely buy a Ryzen 3000 series, but he is referring to sales, not performance. In sales, Intel is still winning. It takes more than a year or two of good performance to gain marketshare, especially with the high volume enterprise market... It takes consistency. Dont forget the really great Ryzen (3xxx seies) just came out this summer. I am sure in a few more years AMD will gain more share.
  • eva02langley - Wednesday, July 31, 2019 - link

    No they are not. the DIY PC and the HEDT platform is now AMD.

    Intel sales are OEM, prebuilts, laptops, chromebooks and server.

    Next year will be detrimental for AMD. They needs to disrupt Intel markets if they want to consolidate their emphasis on the semiconductors level. I do believe AMD will double their actual size as a company, but they need to disrupt Intel other markets if they want to grow even more. They need more than just taking market share, they need to take and create markets.
  • CiccioB - Wednesday, July 31, 2019 - link

    They need to make money, and to do that they have to offer better product which can sustain high margins.
    Up to now CPUs margins are good but GPUs are a hole that swallows all the profits.
    They have to stop that if they want to really grow and not being left at surviving in a corner.
  • eva02langley - Wednesday, July 31, 2019 - link

    Their new product line was not even incorporated in these results. They did really well with over Ryzen 2000, Vega and Polaris for having those numbers. Google is rumored to ditch Intel. If that happens, a lot of other companies are going to follow.

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