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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  • Qasar - Thursday, August 1, 2019 - link

    " and I'm certain many other customers, are feeling betrayed. " how so ?? please explain.
  • ballsystemlord - Saturday, August 3, 2019 - link

    Read the rest of my post. $700 for GPU that has a lot more 7nm silicon (and other parts) (331mm2)[1] then the CPU and $649 for the CPU[2]. Even the total silicon is smaller.

    161.5302mm2 7nm silicon
    122.6512mm2 14nm silicon
    284.1814mm2 Total silicon

    Also, AMD has been a great value buy for years as I proved in my first post. Hence, betrayal.

  • Qasar - Tuesday, August 6, 2019 - link

    then it just must be you, as i dont feel betrayed.
  • ballsystemlord - Tuesday, August 6, 2019 - link

    You can live in your rosy garden as you please, I'll stop disturbing you.
  • Korguz - Wednesday, August 7, 2019 - link

    its not about living is a rosy garden. my reply to you, could be copied and pasted here. amd was the value cpu option, mainly because they were outperformed by even intels lower end parts, but now that they are on par, and even faster then intel, they should be allowed to charge appropriately for their products, as the performance is there, correct ?
  • ballsystemlord - Wednesday, August 7, 2019 - link

    BUT, it's not about "allowed" (or permitted, etc.), it's about the customers. Me, you, everyone else. "Mankind was my business. The common good was my business," said Marley to Scrooge IIRC. By the same token, if AMD is still in business for the customers, which I, perhaps foolishly, assumed to be the case, then they aught to remain the value option.
  • Korguz - Thursday, August 8, 2019 - link

    i think they are still the value option, but just not in the same ( pricing ) way. the value now, is more for the same ( or less ) they intel charges, IE 8 cores for 150 bucks less, or 4 more cores for the same price as intels 9900k :-)
  • ballsystemlord - Thursday, August 8, 2019 - link

    I understand. That's a reasonable position. I still disagree. But that's my opinion, and your's is equally arguable.
  • Korguz - Friday, August 9, 2019 - link

    maybe you are just used to AMD charging the prices they did, cause they had no choice because the performance wasnt there, but now that can charge more and its a little shocking to see AMD being able to charge more now ? :-)
  • ballsystemlord - Friday, August 9, 2019 - link

    I agree.

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