AMD Q1 FY 2019 Earnings Report: Revenue Down But Margins Up
by Brett Howse on April 30, 2019 9:15 PM EST- Posted in
- CPUs
- AMD
- GPUs
- Financial Results
Today AMD announced their Q1 FY 2019 earnings. Revenues were down 23% year-over-year, coming in at $1.27 billion. Gross margin for the quarter was 41%, up 5% from a year ago, but operating income was down 68% to $38 million. Net income was down 80% to $16 million, and earnings-per-share were down 87.5% to $0.01. But why?
| AMD Q1 2019 Financial Results (GAAP) | |||||
| Q1'2019 | Q4'2018 | Q1'2018 | |||
| Revenue | $1272M | $1419M | $1647M | ||
| Gross Margin | 41% | 38% | 36% | ||
| Operating Income | $38M | $28M | $120M | ||
| Net Income | $16M | $38M | $81M | ||
| Earnings Per Share | $0.01 | $0.04 | $0.08 | ||
AMD’s recent success has been driven primarily by their Computing and Graphics segment, however revenue for this segment was down 26% from a year ago, coming in at $831 million. AMD is stating that lower graphics channel sales are the primary reason, and with the crash of cryptocurrency, this makes sense. However, the decline was offset by increased client processor and GPU sales. Operating income for this group was $16 million, compared to $138 million a year ago.
| AMD Q1 2019 Computing and Graphics | |||||
| Q1'2019 | Q4'2018 | Q1'2018 | |||
| Revenue | $831M | $986M | $1115M | ||
| Operating Income | $16M | $115M | $138M | ||
Enterprise, Embedded, and Semi-Custom revenue was down 17% from a year ago, coming in at $441 million. The decline can be mostly attributed to declines in semi-custom revenue, which is mostly consoles that have been on the market for quite a few years now, but some of the decline was offset by higher server sales, and AMD stated that their margin growth for this quarter was driven by the ramp of Ryzen and EPYC processor sales, as well as datacenter GPUs. Despite lower revenue, the operating income for this group is up 385% to $68 million, although $60 million of that is attributed to a joint venture with THATIC.
| AMD Q1 2019 Enterprise, Embedded and Semi-Custom | |||||
| Q1'2019 | Q4'2018 | Q1'2018 | |||
| Revenue | $441M | $433M | $532M | ||
| Operating Income | $68M | -$6M | $14M | ||
All Other had an operating loss of $46 million, compared to a loss of $32 million a year ago.
AMD also announced that their Navi GPU and Rome CPU are going to launch in Q3 of this year which should help bolster sales then, but may impact short-term sales as customers wait for the new products to launch. AMD is forecasting revenue for Q2 to be down approximately 13% year-over-year, with a forecast of $1.52 billion plus or minus $50 million.
Source: AMD Investor Relations
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Alexvrb - Tuesday, April 30, 2019 - link
Yeah Q2 is gonna be rough for them. They're being aggressive with pricing to help, which is nice... but a lot of people are holding out for Zen 2 - myself included. I don't think I'll wait on Navi though, unless they happen to drop a midrange card around the same time. Then again GPU upgrades are the simplest so I might get a cheap card for now and upgrade later.Dragonstongue - Wednesday, May 1, 2019 - link
I am one of those folks, but likely to get Navi when available as my Phenom II is technically more underpowered than my 7870, though I find the Phenom II far more tweakable for my needs :(Zen 2 will be a very nice chunk upgrade for Phenom II likely in the 250%+ range easy (2600 as example is 230%+ range better at ~20-40w less power for double the cores and double the threads to boot all for about the same $ I paid "way back when"
mobo ~$50 more, ram def much more $, cpu about same, gpu ~$150 more (depending)
I hope to get something before the year is out and my $ still holds, papa is going to have a very $ year with very little to stretch, is AMD hits $30+/shr by the time these come out that would be swell, hopefully $ before the end of the month would be great (April-may 2019)
yannigr2 - Wednesday, May 1, 2019 - link
I still have a 1075 at 4GHz. For gaming for sure a bad choice today, but for everything else, more than enough. That being said a mid range Ryzen 3000 model should be 2-3 times faster in many tasks.neogodless - Wednesday, May 1, 2019 - link
Whoa - were you me? Ha - I had a Phenom II and 7870. But 2 months ago I went with the 2700X, and my neighbor gave me his old Geforce 780 GT which is a decent little bump. Currently eying the RTX 2060 but it's still too spendy for my likes. Waiting to see if Navi improves the GPU market.artifex - Tuesday, May 7, 2019 - link
I actually retired my Phenom II 1055T last fall for a Ryzen 2600, on a mini-ITX using B450. I finally just gave up on DDR4 coming down, told myself the discount I got for bundling the board at the same time made up for the premium on the memory. Also happy to be using less power overall, especially after I went to a 75W GPU card. (Actually switched that one months before the rest, to ease the hit to my wallet.)You can do it! :)
P.S. Don't forget to buy a new PSU, too, because your current one is probably 8 or 9 years old like mine was. (Wish I'd gotten one with modular cables, but wow, they were 3x the cost of the basic one I bought.)
yannigr2 - Wednesday, May 1, 2019 - link
OEMs will probably pay in Q2 to have systems ready in Q3, so AMD is going to make money from them in Q2. In Q3 it will be our turn to pay AMD. That's of course if Ryzer 3000 line of CPUs is as good as we hope for. And that means at least equal in gaming to the best Intel model. in everything else but gaming, Ryzen processors are already a better choice. At least on desktop.Opencg - Wednesday, May 1, 2019 - link
I trust that their statements about being on par with the 9900k are true. The question is will they compete with the 9600k and 9700k in terms of value. Of course the 9600k is largely out of stock right now. But if it is in stock when the new ryzen launches that could be an issue.Targon - Wednesday, May 1, 2019 - link
Since AMD will also have 12 and 16 core Ryzen processors, possibly(or probably) at the same clock speeds(all-core boost to 5GHz), AMD will have a big advantage. Remember that AMD pushed Intel to release an 8-core processor, but Intel won't be able to offer a 16 core consumer processor that is cost effective for a LONG time.HStewart - Wednesday, May 1, 2019 - link
I think people need to be realistic here, for one thing it takes a lot to switch hardware especial for big companies. Especially now days that existing hardware is fine and does not need upgrade. On customer front, except for kids playing games - most don't care about desktops at all - if getting a desktop they get an All-in-one, everything has gone mobile. How much sales does AMD believe they can sell to AMD customers and do they really expect people to change. The fan boy stuff on forums does not help the situation luckily AnandTech is not as bad WCCF.sa666666 - Wednesday, May 1, 2019 - link
You're the biggest Intel fanboy/shill there is on this site. So it's pretty rich that you come here (into an article that has zero to do with Intel) and pontificate on the 'fanboy stuff on forums'. Why don't you follow your own advice and keep silent on topics that aren't related to your Intel fantasy.Of course if you did that you wouldn't be able to shill every chance you get. So I expect you to keep being two-faced about it (ie, complaining about fanboys when you're the poster-child for it).