News AMD 3Q Earnings Report

[Hitman928]

AMD will announce 3Q earnings after the market closes today. I will update this post as info comes out.

In the mean time, saw this on [WCCF]

AMD Outsells Intel in Korea for First Time in History, Doubles Sales in Europe

Once again AMD finds itself making headlines ahead of its earnings report tomorrow for the headway its products have recently been making around the world. In Korea, the company's processors have reportedly outsold Intel's for the first time in history. According to the research arm of...

wccftech.com

AMD has traditionally done very well in the do-it-yourself channel market, where customers buy parts separately and build their own PCs. Although the pre-built OEM market has been much much harder for the company to penetrate, due to Intel's multi-decade long entrenchment in that space.


Which is precisely why this is such a big deal, AMD has rarely ever outsold Intel in the pre-built market and it has in fact never done so in Korea, a market where both of AMD's competitors NVIDIA & Intel have traditionally been very strong in.

I'm not familiar with the Korean market so I don't know how big it is or how much it is driven by more boutique builders or by large OEMs. A European report linked in the WCCF article states that AMD rose from 7% to 12% of pre-built machines in 3Q in the European region. It will be interesting to see what AMD reports today in their quarterly earnings.

 

[UsandThem]

I'm not familiar with the Korean market so I don't know how big it is or how much it is driven by more boutique builders or by large OEMs.

Everyone knows Kim Jon-un only games on Intel PCs.

It ought to be interesting to see what AMD has been able to do since the launch of the Ryzen 3000 series.

 

[Hitman928]

AMD Reports Third Quarter 2019 Financial Results

seekingalpha.com

AMD EPS in line, slight miss on revenue ($1.8B versus $1.81B expected). Gross Margin increased to 43%. More coming.

 

[Hitman928]

• Computing and Graphics segment revenue was $1.28 billion, up 36 percent year-over-year and sequentially. Higher revenue was primarily driven by increased Ryzen client processor sales.
• Enterprise, Embedded and Semi-Custom segment revenue was $525 million, down 27 percent year-over-year and 11 percent sequentially. The year-over-year and quarter-over-quarter decreases were primarily due to lower semi-custom product revenue, partially offset by higher EPYC processor sales.
• For the fourth quarter of 2019, AMD expects revenue to be approximately $2.1 billion, plus or minus $50 million, an increase of approximately 48 percent year-over-year and approximately 17 percent sequentially. The year-over-year and sequential increases are expected to be driven by an increase in Ryzen, EPYC and Radeon product sales. AMD expects non-GAAP gross margin to be approximately 44 percent in the fourth quarter of 2019.

In summary, Ryzen sales doing very well, Epyc sales slowly but steadily increasing, GPU sales rebounding. Semi-custom sales continue to sink due to current consoles being at end of life but semi-custom expected to rebound next year as new consoles are scheduled to be released in 2020. Next quarter expected to see another large increase in revenue due to increasing Ryzen, Epyc, and GPU sales.

 

[thesmokingman]

Good stuff... it's gonna be crazy at the opening tomorrow.

 

[Hitman928]

I'll also add that AMD had forecast revenue of $1.75-1.85B with a gross margin of 43% for this quarter during their 2Q earnings report. So they were exactly at the midpoint of their revenue projection and spot on for the margin.

If they hit their projection of $2.1B (plus or minus $50M) in 4Q, I believe it would be their highest single quarter revenue ever.

 

[Hitman928]

Good stuff... it's gonna be crazy at the opening tomorrow.

After market stock price initially rose like 3% but then quickly dropped into the negative. There was a run up in the price leading up to the earnings report so I think there was some people buying in hoping for a earnings report that soundly beat the projections. When that didn't happen, there was a bit of a sell off. Like you said, opening tomorrow will probably be crazy.

 

[thesmokingman]

After market stock price initially rose like 3% but then quickly dropped into the negative. There was a run up in the price leading up to the earnings report so I think there was some people buying in hoping for a earnings report that soundly beat the projections. When that didn't happen, there was a bit of a sell off. Like you said, opening tomorrow will probably be crazy.

Profit takers. They will get screwed on the jump tomorrow.

 

[trivik12]

I'll also add that AMD had forecast revenue of $1.75-1.85B with a gross margin of 43% for this quarter during their 2Q earnings report. So they were exactly at the midpoint of their revenue projection and spot on for the margin.

If they hit their projection of $2.1B (plus or minus $50M) in 4Q, I believe it would be their highest single quarter revenue ever.

They should beat when having so many new products and Intel's pipeline being so weak with 10nm issues. Their PE is like growth companies but YOY growth of 9% is not great for a growth company. May be Q4 is when they will explode.

 

[thesmokingman]

They should beat when having so many new products and Intel's pipeline being so weak with 10nm issues. Their PE is like growth companies but YOY growth of 9% is not great for a growth company. May be Q4 is when they will explode.

So true. This is where wallstreet has issues analyzing AMD. They are not going to blow up with a goliath like Intel fighting them every step of the way. They will grow by chipping away at Intel's dynasty. At the same time they were worth $2.10 a share not more than 3 years ago. I don't trust analyst to understand a complex situation like AMD. None of those yahoos understood anything when the stock was worth pennies. Did anyone buy in when it was worth 2 bucks and change? That was just after Keller was brought back in and Su began to put their long term plan to rebuild from the ground up.

 

[LikeLinus]

Curious. Their gross margin was up 3% total? But people on AT were saying they had taken 30% of the marketshare from Intel.

There are several things to point out here. Those who think AMD is "curb stomping" Intel, are you really happy with a 3% gross margin. Looking more into the numbers...

"Computing and Graphics segment revenue was $1.28 billion, up 36 percent year-over-year and sequentially. Higher revenue was primarily driven by increased Ryzen client processor sales."

This one kills me......

"Enterprise, Embedded and Semi-Custom segment revenue was $525 million, down 27 percent year-over-year and 11 percent sequentially. The year-over-year and quarter-over-quarter decreases were primarily due to lower semi-custom product revenue, partially offset by higher EPYC processor sales. "

This is the biggy. I keep hearing people talk about how AMD EPYC is making headway into the Enterprise/server market. Funny thing is, they are DOWN 27% year over year.

"AMD launched the 2nd Gen AMD EPYC™ processors with record-setting performance across multiple enterprise, cloud and high performance computing workloads, alongside an expansive, global ecosystem of data center partners and customers. "

LOL, but you are DOWN 27% Year over year??? I've said this all along, you have those individuals who think they are "curb-stomping" intel and those who are realistic. AMD having a good CPU line-up is a good thing for consumers, but they don't realize that you can't win a battle in 2-3 years. It's a long term game and we don't know what is in store. AMD is still viewed as the Kia of CPUs (This is why Microsoft put the AMD in the consumer Surface Laptop and the Intel in the Business model). MS realizes that business want Intel and they are a LONG TERM reliable partner. They don't want to buy a Kia, no matter now good they may be at this point or if you can list 10 AMD cpus in your signature, lol.

Let's see if they can keep it up for more than a cycle or two of CPUs. Lord knows they fell flat on their face after challenging Intel with 1Ghz CPU and it took them 10+ years to make something relative. It's a great cpu for the DIY, but no company is really going to trust their datacenter or enterprise with them. Hence the loss of 27% in the Enterprise market. It can change, but some people here make it sound like they already have.

Either way, good for AMD (really TSMC) for their effort and pressure on Intel. People seem to forget that AMD isn't actually fabbing those CPUs, lol.

 

[Hitman928]

They should beat when having so many new products and Intel's pipeline being so weak with 10nm issues. Their PE is like growth companies but YOY growth of 9% is not great for a growth company. May be Q4 is when they will explode.

If they hit their projection the YOY growth for Q4 would be 48% but only 3.5% for FY19 over FY18. However, FY20 should show large growth with the new consoles coming out and Epyc projected to continue to increase in sales.

 

[liahos1]

this print is curious/laughable.

They missed consensus estimates for the epyc segment by a fair bit. 525mln reported vs 678.7mln consensus.

Even if you assume its all console driven, then why was gross margin inline? Epyc gross margin should a magnitude higher than console gross margin, yet no upside.

Also to put things in perspective -
Intel grew DCG 1.4bln dollars sequentially. AMD grew epyc what 70-80mln dollars?

This isn't exactly an opteron moment lol.

 

[LikeLinus]

It's the curb stomping effect. AMD is the new Apple.

 

[moinmoin]

There is no Epyc segment unfortunately, and aside consoles, other semi-custom and embedded the "Enterprise, Embedded and Semi-Custom" segment also includes the Radeon Instinct line that apparently has fallen off the face of the earth (I hope we hear questions and answers in the call on that topic). The current Epyc 7002 gen also launched pretty late into this quarter to make a decent dent. It was originally announced to launch before the consumer Ryzen but actually launched a month after that.

This isn't exactly an opteron moment lol.

Now I'm curious. How did the "opteron moment" look in the stock market?

 

[LikeLinus]

Weird. I keep hearing from members how EPYC is curb-stomping Intel and AMD themselves talks about how it's " record-setting performance across multiple enterprise, cloud and high performance computing workloads, alongside an expansive, global ecosystem of data center partners and customers."

But you know, that division is down 27% year-over-year. Not sure why certain people here keep telling us that AMD is "curb-stomping" Intel.

 

[liahos1]

There is no Epyc segment unfortunately, and aside consoles, other semi-custom and embedded the "Enterprise, Embedded and Semi-Custom" segment also includes the Radeon Instinct line that apparently has fallen off the face of the earth (I hope we hear questions and answers in the call on that topic). The current Epyc 7002 gen also launched pretty late into this quarter to make a decent dent. It was originally announced to launch before the consumer Ryzen but actually launched a month after that.


Now I'm curious. How did the "opteron moment" look in the stock market?

do you understand the term stock bubble?

 

[moinmoin]

do you understand the term stock bubble?

The "opteron moment" was a "stock bubble"?

 

[trivik12]

If they hit their projection the YOY growth for Q4 would be 48% but only 3.5% for FY19 over FY18. However, FY20 should show large growth with the new consoles coming out and Epyc projected to continue to increase in sales.

Console sales are cyclical. There is a burst and then a huge slow down. So if next year see big growth, we will see a drop in 2021 which won’t help. Plus we are in the era of Google and Apple with Gaming subscription that work with multiple devices. Not sure if consoles will remain long term growth engine.

AMD needs to focus on growth sectors and then deliver product. I feel one thing holding back AMD in laptops is lack of integrated SOC. They have to use 3rd part Wifi chips for example. So the Surface laptop(awesome to see Ryzen in ultra premium laptop) with Ryzen did not have great review. I hope they address that.

Plus is AMD focusing on AI sector. Nvdia seem to be the GPU of choice when it comes to AI. Intel is throwing everything to see if something sticks but outside their core xeon cpus nothing has stuck so far.

I see finviz has put in slightly over a $1 EPS for 2020. That would be a impressive earnings growth. I wonder if they can sustain that.

Anyway I am glad AMD is doing well. I will buy AMD shares on dips and trade them when they are at all time high. Not convinced they are long term holds until they are consistent in earnings and may be start to pay dividend at some point.I prefer Apple and Microsoft at this point.

 

[Markfw]

Weird. I keep hearing from members how EPYC is curb-stomping Intel and AMD themselves talks about how it's " record-setting performance across multiple enterprise, cloud and high performance computing workloads, alongside an expansive, global ecosystem of data center partners and customers."

But you know, that division is down 27% year-over-year. Not sure why certain people here keep telling us that AMD is "curb-stomping" Intel.

EPYC is curb-stomping Intel on performance of servers. The idiots that buy these for enterprise will take some time to "wake up" and their budgets and spending happen 6 months or more before the product is delivered. It will take time for the sales numbers to catch up with the performance numbers.

Are you doubting the performance numbers ?

Also, are you contesting this summation from the OP ? "In summary, Ryzen sales doing very well, Epyc sales slowly but steadily increasing, "

 

[joesiv]

Weird. I keep hearing from members how EPYC is curb-stomping Intel and AMD themselves talks about how it's " record-setting performance across multiple enterprise, cloud and high performance computing workloads, alongside an expansive, global ecosystem of data center partners and customers."

But you know, that division is down 27% year-over-year. Not sure why certain people here keep telling us that AMD is "curb-stomping" Intel.

I'm not sure you read the 27% part properly. Combined down 27% which includes Semi-Custom, Epyc offset some of the loss.

Semi-Custom is primarily Videogame Console APU's. PS4 and Xbox One are nearing end of life, and the next generation APU's are due out in a year or so, it's normal for Semi-Custom's to be down during this phase of the console generation.

Epyc up and is doing well enough to offset some of the loss.

 

[Olikan]

But you know, that division is down 27% year-over-year. Not sure why certain people here keep telling us that AMD is "curb-stomping" Intel.

????
Epyc increased 50% Q/Q

 

[LikeLinus]

EPYC is curb-stomping Intel on performance of servers. The idiots that buy these for enterprise will take some time to "wake up" and their budgets and spending happen 6 months or more before the product is delivered. It will take time for the sales numbers to catch up with the performance numbers.

Are you doubting the performance numbers ?

Also, are you contesting this summation from the OP ? "In summary, Ryzen sales doing very well, Epyc sales slowly but steadily increasing, "

Curiosity, have you actually worked for a Fortune 50 company? You talk a lot about Enterprise solutions, but you seem to know so little. What is your real life enterprise experience vs. having a few computers in your possession?

I'm not doubting performance numbers, I'm doubting the "curb-stomping"' that you claim AMD is handing to Intel. The 3Qs only emphasis what I mentioned in previous threads.

 

[LikeLinus]

I'm not sure you read the 27% part properly. Combined down 27% which includes Semi-Custom, Epyc offset some of the loss.

Semi-Custom is primarily Videogame Console APU's. PS4 and Xbox One are nearing end of life, and the next generation APU's are due out in a year or so, it's normal for Semi-Custom's to be down during this phase of the console generation.

Epyc up and is doing well enough to offset some of the loss.

I'm just going to leave this here for you to read again. Intel would be even further down in this market segment considering PS4 is the biggest selling console in overall volume. What would you expect Intel numbers to be? Are they down 27% in the same segment? It's great and all that you want to break it down to a small overall segment, but think outside the box here.

How about breaking out how EPYC is doing in their segment vs Xeon? You want to talk about Consoles, but let's talk about the real market and differentiation. Do you have numbers for that? It's spectacular to say EPYC is doing great, with no actual DATA.

 

[Markfw]

Curiosity, have you actually worked for a Fortune 50 company? You talk a lot about Enterprise solutions, but you seem to know so little. What is your real life enterprise experience vs. having a few computers in your possession?

I'm not doubting performance numbers, I'm doubting the "curb-stomping"' that you claim AMD is handing to Intel. The 3Qs only emphasis what I mentioned in previous threads.

I retired from a fortune 500 company. I was very high up in the tech /support section, but the people buying the servers had no idea what they were buying. Their only thoughts were "Intel is the only real CPU". Morons. Without going into all the details, there was one person who supported me, and recognized my accomplishments. When I pointed out a few facts one day on a point he agreed with me on, (he was the CFO of my division, BTW), his comment was "its beyond my pay grade to affect such a change." The problem was, his boss the SENIOR CFO was a moron, who knew nothing about anything technical.

As for the "I seem to know so little" we don't take lightly to insults in the tech forums. You can disagree, but no personal attacks.

As for the curb-stomping, Even Toms hardware, and every review site I have seen have backed me up, they are handing Intel a thrashing in the server sector, not just beating them.