AMD revenue drops 13 percent

July 31, 2019 | 11:07

Tags: #dr-lisa-su #epyc #financial #radeon #ryzen #zen-2

Companies: #amd

AMD has reported a 13 percent year-on-year decline in revenue for the second quarter of its financial year, though president and chief executive Dr. Lisa Su paints a picture of impending growth courtesy of the Zen 2 product family launches.

While AMD's latest financial filings show a 20 percent uplift in revenue quarter-on-quarter, the long-term view isn't quite as easy reading: The company's revenue has dropped 13 percent year-on-year due to lower revenue across its computing and graphics businesses and enterprise, embedded, and semi-custom arm. The company maintained, however, its 41 percent gross margin - an increase of four percentage points year-on-year - from the previous quarter, and AMD president and chief executive Dr. Lisa Su claims better is to come.

'I am pleased with our financial performance and execution in the quarter as we ramped production of three leadership 7nm product families,' claims Dr. Su of the company's earnings. 'We have reached a significant inflection point for the company as our new Ryzen, Radeon and Epyc processors form the most competitive product portfolio in our history and are well positioned to drive significant growth in the second half of the year.'

The company's financial quarter saw a year-on-year increase in average selling price (ASP) for mainstream processors, driven by sales of higher-end Ryzen parts, though a quarter-on-quarter dip owing to a higher number of low-cost mobile parts being added to the mix. The company's GPU division, meanwhile, saw a year-on-year increase driven primarily by sales into the data centre, rather than gaming. Finally, AMD's enterprise, embedded, and semi-custom arm dropped 12 percent year-on-year but jumped 34 percent quarter-on-quarter - thanks, the company claims, to increased sales of its high-margin Epyc processor parts.

AMD has projected that it will grow 18 percent quarter-on-quarter for 3Q2019, and nine percent year-on-year - but that its poor start to the year is likely to limit its full-year growth to mid-single-digit percentages - dragged down, it claims, by its semi-custom work, without which it would grow 20 percent year-on-year.

Investors, however, are not impressed: after gaining 1.16 percent in market trading, AMD's share price plunged in after-hours trading before settling 5.37 percent down.


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