AMD reports strong quarter on Ryzen, EPYC chip sales

cpyc chip from amd
Robust demand for its Ryzen and second-generation EPYC chips produced solid sales and earnings increases for AMD in the third quarter as the company keeps pace with Intel. (AMD)

Advanced Micro Devices posted earnings of $120 million, or 11 cents per share, on sales of $1.8 billion in its third quarter ended September, up from $102 million, or 9 cents per share, on sales of $1.65 billion in the same quarter a year ago.

In addition, AMD saw its gross margins rise from 40 to 43% year-over-year, which the company attributed to increased sales of its Ryzen and EPYC processors. During the quarter, AMD launched its second-generation EPYC processors, designed for multiple enterprise, cloud, and high performance computing workloads.

Last week, Intel announced it had a robust third quarter and raised its guidance. AMD’s third-quarter results appeared to indicate the company is ceding nothing to its chief rival. AMD’s second-generation EPYC processor, also known as Rome, was successfully received by customers, including Google and a host of others, as the computing giant takes dead aim at Intel in the growing cloud computing space.

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“Our first full quarter of 7nm Ryzen, Radeon and EPYC processor sales drove our highest quarterly revenue since 2005, our highest quarterly gross margin since 2012 and a significant increase in net income year-over-year,” said Dr. Lisa Su, AMD president and CEO, in a statement. “I am extremely pleased with our progress as we have the strongest product portfolio in our history, significant customer momentum and a leadership product roadmap for 2020 and beyond.”

Inside the numbers

AMD said revenue from its Computing and Graphics segment was $1.28 billion, up 36% year-over-year and sequentially, which the company attributed to increased Ryzen client processor sales. Average selling prices of client processors increased year-over-year.

One weak spot was revenue from AMD’s Enterprise, Embedded, and Semi-Custom segment, which at $525 million fell 27% year-over-year and 11% sequentially. AMD attributed the decline to lower semi-custom product revenue, which was partially offset by higher EPYC processor sales.

For the fourth quarter of 2019, AMD projects revenue of about $2.1 billion, up 48% year-over-year and 17% sequentially. The increases are expected to be driven by rising Ryzen, EPYC, and Radeon product sales. AMD expects non-GAAP gross margin to be approximately 44% in the fourth quarter of 2019.

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