AMD reports best quarterly profit in seven years on new products
(Bloomberg) -- Advanced Micro Devices Inc. reported earnings that beat analysts’ estimates, signaling the chipmaker’s promising new products are starting to help it claw back market share.
Second-quarter net income was $116 million, or 11 cents a share, compared with a loss a year earlier. It was the company’s highest quarterly net income in seven years, AMD said in a statement Wednesday. Analysts had forecast profit of $108.6 million. Revenue rose 53 percent to $1.76 billion, also beating estimates. The shares rose 7 percent in extended trading.
Under Chief Executive Officer Lisa Su, AMD has dragged itself back from the brink of running out of cash, and rolled out new chip designs it says can win back customers. Investors who bid up the stock more than 50 percent this year have been seeking evidence that it’s doing that.
Third-quarter revenue will be about $1.7 billion, plus or minus $50 million, the Santa Clara, California-based company said. That compares with an average analyst estimate of $1.76 billion, according to data compiled by Bloomberg.
AMD is the second-largest maker of graphics processors for add-in cards for PCs used by gamers, behind Nvidia Corp. Demand has been boosted sporadically by sales related to cryptocurrency mining, because graphics chips are good at the kind of processing needed for such activity. The market has been volatile though with orders for graphics cards fluctuating with the values of the currencies.
“Our long-term technology bets position us very well for the future.” Su said in the statement. “We are confident that with the continued execution of our product roadmaps, we are on an excellent trajectory to drive market share gains and profitable growth."
Like Intel Corp., AMD is dealing with a market for personal computers that’s more than 100 million units down from its peak in 2011, but is no longer declining rapidly. Intel, which reports its quarterly performance Thursday, has compensated for the slowdown by forcing AMD out of the fast-growing and profitable market for processors used in server computers.