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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  • RSAUser - Thursday, August 1, 2019 - link

    4GHz boost on a laptop part is pretty good, my 4720HQ doesn't go past about 3.6GHz and usually drops to like 2.8GHz all-core if I render. The 7700HQ that superseded it in current gen only boosts to 3.8GHz.

    Only the latest 8750H supposedly hits 4.1GHz, but I bet that's only for a short window on one core, all core it probably throttles quite a bit.
  • CiccioB - Wednesday, July 31, 2019 - link

    Intel GPU do not need to be successful to simply destroy AMD APU segment and limiting Nvidia low level market monopoly.
    Those GPU will become the de-facto standard of the market and being 10% slower than the rivals (if ever slower) won't automatically make them a fail. Surpassing their performance/resource ratio will be very difficult and expensive for the rivals which will start selling at very discount price and probably abandoning the market (I'm thinking about Nvidia and its now obsolete proposals like GT1030 or even older boards that seems to still sell a lot).
    AMD APUs will need to find a niche to survive as none will be choosing them for performance (lower or similar to the competitions offer), consumption or features (they are quite behind Nvidia in all these aspects, and if Nvidia will struggle to compete against Intel Xe GPUs, AMD has no chance at all).
  • khanikun - Wednesday, July 31, 2019 - link

    Ya, the last time they were in a favorable position was during the Athlon 64 and Athlon 64 X2 procs. During that time though, they went with high margins, instead of gathering market share.

    That's why I didn't bother getting an X2. The cheapest one was double the price of the cheapest dual core from Intel. Regular Athlon 64 wasn't even an option for me, since it sucked with multitasking. Have one high demand task and your system was useless doing anything else, unlike the old single core HT enabled Intel procs.

    They seem to be going the opposite route this time. Hopefully it works for them.
  • eva02langley - Wednesday, July 31, 2019 - link

    That is not true. Zen 1 was kicking Intel HEDT platform to the dust while being mainstream, and they were on parity process node. Intel process node advantage will never be a reality again. We are at the end of the road and they are now behind while they were having a 4 years lead. Samsung and TSMC are now the process node leaders, not Intel. You are making the assumption that AMD will not advance through that period of time. The rumors are that they will bring 4 threads per core, during the meantime Intel is trap with security vulnerabilities killing their performances and losing the trust of their customers. Google and Amazon are now considering EPYC way more seriously, and we know that Microsoft will probably use Zen for their Azure gaming servers.

    I am not seeing the same way at all.
  • Klimax - Friday, August 2, 2019 - link

    Quick note for anybody reading this thread: This post is pretending reality is red. Not so. I suggest for anybody curious to revisit reviews to see how it really was...
  • Yojimbo - Wednesday, July 31, 2019 - link

    A big part of the publishing of AMD's Q2 results was their weak guidance for Q3. Previously, AMD had maintained an optimistic view of the 2nd half of 2019 while Intel and NVIDIA and other semiconductor manufacturers had paired back their expectations for the back half of the year at their Q1 conference calls. Now AMD has cut their guidance for the rest of the year. That is most likely why their stock went down in after hours trading following the release of the earnings report press release.
  • CiccioB - Wednesday, July 31, 2019 - link

    Stockholders needs different numbers than a mere $52M of net revenue to give a meaning to the price the stock has reached.
    AMD cannot continue trading money for market share.
    Market share that will most probably been lost on next Intel return with a working PP.
    Someone just forgot that AMD actual products had to battle with Intel 10nm new architecture. Intel failed at providing it making this AMD product a little better than what Intel is offering on its now ancient 14nm PP.
    When Intel will full deploy 10nm and better with the 7nm advantages where they are probably exploiting all the interconnection they have created up to know, AMD advantage with small chiplets will simply evaporate and won't be able to sell its product but with a further price cut.
    Those $52 may become $100M in next quarters but they could stay that for next decade leaving AMD where it was 2 years ago.. in surviving mode (that's where Intel want and needs it to stay).
  • CiccioB - Wednesday, July 31, 2019 - link

    I correct, $35M of net revenue, not 52.
  • RSAUser - Thursday, August 1, 2019 - link

    AMD can trade potential profit for market share, as its value would be branding.
    AMD's chiplet advantage will not go away for another gen or two, and AMD will not stay idle. Both Intel and AMD said they are working on 3D chiplet architecture, which will be interesting.

    I bet within the next few years we will finally move away from the current motherboard design, it was done many decades ago and doesn't reflect current requirements as well anymore, especially as latency becomes ever more important due to increased power. We have already moved everything to pretty much PCIe.
  • CiccioB - Friday, August 2, 2019 - link

    "AMD can trade potential profit for market share, as its value would be branding."
    No if at the end you have miserable net profits with respect to the total revenue.
    Shareholders now want money, not the promises which have been given for almost a decade.
    It is time for AMD to get what they have been developing for all this time. If they are not able to that now with all the advantages they have, the chance they will can in future will shrink.

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