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AMD records its highest quarterly net income in seven years

CHIPMAKER AMD has beat analysts’ expectations for its latest quarterly earnings, recording its highest quarterly net income in seven years.

According to Reuters, Team Red reported a net income of $116m (£88.6m), or 11 cents per share, in the second quarter ended June 30, compared to a loss of $42m (£32m), or 4 cents per share, in the same quarter a year ago. That’s some turnaround.

The firm’s revenue also rose by 53 per cent to $1.76bn (£1.34) during the three-month period, marginally topping estimates of $1.72bn (£1.31m).

These figures saw the company’s shares soar up five per cent in extended trading, something which has happened on a regular basis over the past few years. For example, AMD reported that its shares have more than doubled in the past two years on continued demand for graphics chips used in computers, video game consoles and a variety of other applications.

AMD also recorded some positive results in its graphics and computing business, which makes processors for servers and gaming consoles. Here, sales rose 64 per cent to $1.09bn (£832,000), driven largely by its Ryzen desktop processors and Radeon graphics cards.

It wasn’t all positive, though. This division also saw a decline of three per cent quarter-over-quarter, something which the firm says was due to lower revenue from graphics processing units (GPU) in the blockchain market.

Nevertheless, AMD’s gross margins also grew by 37 per cent, with its GPU average selling price increasing due to Radeon and sales to data centres.

“We think investors are focused on AMD’s gross margin expanding as a measure of success of its new products,” said Stifel analyst Kevin Cassidy, who added that the increase in average selling price of GPUs also helped offset fears of weak cryptocurrency-related demand.

On the server side, AMD also saw some growth in its EPYC server processors, which gained market share during a stabilising PC market. µ

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Source : Inquirer

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