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

    I doubt AMD will ever be gone for good, the US would bail them out as Army rules dictate that there must be at least 2 suppliers.
  • IlllI - Wednesday, July 31, 2019 - link

    It is lack of laptop sales. PC/desktop sales are in decline, but laptops are still going strong, of which intel has a massive majority in market share.
  • CiccioB - Wednesday, July 31, 2019 - link

    Unfortunately for AMD it has very weak laptop offer.
    They just have those APUs which are good for medium sized laptop and nothing for ultra slim ones.
    More over, they do not have a single GPU that is power efficient enough to replace Nvidia discrete offer in that market.
  • RSAUser - Thursday, August 1, 2019 - link

    Well, if they price it well, then AMD GPU can compete. Remember, the desktop GPUs are way overlcocked beyond the efficiency curve. They can sell for cost price and make a profit on the CPU, would help branding a lot if they can sell all AMD machines.
  • MASSAMKULABOX - Thursday, August 1, 2019 - link

    SO, sell at cost , and make it up in Volume ..I see /s
  • CiccioB - Friday, August 2, 2019 - link

    This quarter at $35M on a total revenue of more than $1500M just shows that AMD is alreading selling at cost.
    Do you want them to go in red again? If they ever do at this point with these products I doubt it can ever become profitable for the rest of its (would be short) life.
  • nandnandnand - Wednesday, July 31, 2019 - link

    The lack of 6 and 8 core options for laptops is glaring.

    I'm not in for an AMD laptop APU until they have 8 cores and AV1 decoding on the GPU. Navi's media decoder on the desktop GPUs does not support AV1, so I could be skipping until at least 2021.
  • CiccioB - Wednesday, July 31, 2019 - link

    It's not only a problem of n# of cores.
    AMD has not SKU good for ultra thin laptop or 2in1. And the integrated APU makes it a bad choice for high end ones that need a (big) discrete GPU.
    Intel and Nvidia have the entire market of such devices, and they will until AMD will make APU with smaller iGPU and more core for high end laptop or office oriented ones or smaller packaged version for ultra thin client.
  • nandnandnand - Wednesday, July 31, 2019 - link

    I'll concede that's it's not just about # of cores. But that's a big deficiency given that Intel has 8 cores on mobile and is rumored to be going for 10 cores. If I want a top of the line AMD mobile Picasso APU, the Ryzen 7 3750H, that's just 4 cores. The Renoir successor may not even have Navi graphics, and even if it does, Navi won't do AV1. It's not what I want to be using for 5+ years.

    On the very low end, they did recently release two low-powered (6 W) SKUs for devices such as fanless Chromebooks... but they are 28nm Excavator parts rather than Zen based. Noooooo!
  • neblogai - Wednesday, July 31, 2019 - link

    MSI estimated that gaming laptop market is 5% out of 160mln. laptops sold per year. Majority of the market will be happy with 4 cores or less, as long as the laptop is snappy, looks good, and has good battery life. Afterall, Intel is also releasing many dual core and quadcore parts. So 7nm Renoir will be competitive in that main, non-gaming laptop market.
    Now, regarding the VCE- it would not be surprising for Renoir to support the latest codecs, even if it is Vega. I would not be discounting Renoir simply based on an early guess about VCE.

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