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.
“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.