SAN FRANCISCO — Advanced Micro Devices Inc. (AMD) beat analysts' expectations with strong second quarter results and outlook for the third quarter driven by sales of its Ryzen processors and continued strong sales of its graphics chips.
AMD's second quarter sales rose 18 percent year-over-year and 24 percent sequentially to reach $1.22 billion, led by 51 percent year-over-year growth in sales by the company's computer and graphics segment. AMD reported a net loss of $16 million for the quarter, compared to a profit of $69 million in the second quarter of 2016 and a loss of $73 million in the first quarter of this year.
On a pro forma basis, excluding charges, AMD reported a second quarter net income of $19 million, its first non-GAAP profit in three years.
Lisa Su, AMD CEO, said in a conference call with analysts that the company enjoyed a strong second quarter as it continues to ramp its high-performance product portfolio. "Importantly, we returned to non-GAAP net income profitability in the quarter, driven by strong growth in our computing and graphics segment," Su said.
Lisa Su
The quarterly results highlight the progress AMD has made in a slow turnaround that began when Su joined the company five years ago. AMD's stock surged in value in the wake of the earnings report, soaring more than 10 percent to mark a new 10-year high. During the second quarter, the company unveiled a new series of server processors, Epyc 7000, new Ryzen processors for PCs and several graphics chips.
"All major PC OEMs have announced premium Ryzen-based desktop systems, with widespread availability expected for the back-to-school and holiday seasons," Su said. She added that the company is on track to complete the full Ryzen family in the second half of the year, including Ryzen 3 processors targeting mainstream and value PCs, Ryzen Threadripper processors targeting high-end systems and Ryzen Mobile APUs for the consumer market.
AMD said it expects sales to increase between 20 and 26 percent sequentially in the third quarter to between $1.46 billion and $1.5 billion. The midpoint of this forecast would represent a 15 percent year-over-year increase in sales.
"Given our first half 2017 performance and our visibility into the third quarter, we are happy to report we are progressing ahead of our annual revenue guidance and we look forward to a strong year overall," Su said.
AMD did report that sales in its embedded and semi-custom segment declined 5 percent sequentially and 44 percent sequentially. Su said semi-custom unit shipments grew sequentially and down year-over-year entering the fifth year of the current cycle of gaming consoles.
—Dylan McGrath is the editor-in-chief of EE Times.
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