AMD Q1 FY 2019 Earnings Report Is In — Tough Quarter All Around

AMD Q1 FY 2019 earnings were announced as expected on 4/30/2019 after market close. Revenues were down 23% year-over-year, coming in at $1.27 billion. Gross margin for the quarter was 41%, up 5% from a year ago, and operating income was down 68% to $38 million, Net income was down 80% to $16 million, and earnings-per-share were down 87.5% to $0.01. More specifics from AnandTech here.

Analyst take: The street had a mixed response to AMD, and in the wake of the Fed’s interest rate news, AMD had a tougher day to report than those that went in the week before. I believe all in all it was a tough quarter for AMD.

Over the past few quarters, we have heard claims from AMD that they expected to have a larger play in the enterprise server space, even predicting near double digit market share. This bullish talk has fanned the flames of some investors, leading to some bullish takes in the market but the numbers just don’t match up.

Those near double digit predictions in the server space still have AMD hovering below 5% and Intel, for all their woes, still rule that market — and will for the foreseeable future. In short, all of AMD’s focus on taking business from Intel doesn’t seem to be working.

The fundamentals weren’t much better either, as revenue predications and EPS miss. Revenue is way down from a year ago, and I’m not sure where they plan to make up that shortfall. I think it will be interesting to see how they respond with their significant semi-custom business, also seeing a huge decline in the wake of aging gaming console business and a lack of requirements for new semi-custom chips.

AMD’s official stance post earnings report is that “2019 is a growth year” — we’ll be watching with interest.

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Daniel Newman

Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. From Big Data to IoT to Cloud Computing, Newman makes the connections between business, people and tech that are required for companies to benefit most from their technology projects, which leads to his ideas regularly being cited by CNBC, Barrons, Business Insider and hundreds of other sites across the world. A 6x Best-Selling Author including his most recent “Futureproof, Digital Transformation in the Experience Economy” Daniel is also a Forbes and MarketWatch (WSJ) contriburor. MBA and Graduate Adjunct Professor, Daniel Newman is a Chicago Native and his speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
Daniel Newman