AMD announced their fourth quarter earnings for their 2018 fiscal year today, and the company has continued its upward trajectory, with revenue gains of 6% year-over-year to $1.42 billion. Gross margin, which was long a burden for the company, is now right in the sweet spot at 38%, up 4% from a year ago. Operating income for the quarter was $28 million, compared to an operating loss of $2 million last year, and net income is now in the black as well at $38 million, compared to a net loss of $19 million a year ago. That resulted in earnings per share of $0.04, compared to a $0.02 loss per share in Q4 2017.
| AMD Q4 2018 Financial Results (GAAP) | |||||
| Q4'2018 | Q3'2018 | Q4'2017 | |||
| Revenue | $1419M | $1653M | $1340M | ||
| Gross Margin | 38% | 40% | 34% | ||
| Operating Income | $28M | $150M | -$2M | ||
| Net Income | $38M | $102M | -$19M | ||
| Earnings Per Share | $0.04 | $0.09 | -$0.02 | ||
Computing and Graphics has been the main contributor of AMD’s resurgence ever since AMD’s Ryzen CPU was launched, and revenue for this segment was up 8.6% to $986 million. Even more important, operating income for the segment was up 248% to $115 million. AMD sounds to have a busy year for 2019 which should be great news for its investors and customers.
| AMD Q4 2018 Computing and Graphics | |||||
| Q4'2018 | Q3'2018 | Q4'2017 | |||
| Revenue | $986M | $938M | $908M | ||
| Operating Income | $115M | $100M | $33M | ||
Enterprise, embedded, and semi-custom didn’t perform quite as well, with revenue more or less flat year-over-year at $433 million. AMD’s APU wins in both the Xbox and PlayStation have contributed a lot to this segment over the last couple of years, but the enterprise CPU space may be a bit tougher nut to crack than the consumer market, but the flat revenue is deceiving, since EPYC sales are offsetting lower semi-custom sales. AMD’s operating loss for this segment did improve though, with a $6 million loss this quarter compared to a $13 million loss a year ago, thanks to the higher margins in enterprise processors.
| AMD Q4 2018 Enterprise, Embedded, and Semi-Custom | |||||
| Q4'2018 | Q3'2018 | Q4'2017 | |||
| Revenue | $433M | $715M | $432M | ||
| Operating Income | -$6M | $86M | -$13M | ||
AMD’s All Other had a sizeable loss this quarter at $81 million, compared to a $22 million loss a year ago. AMD chalks this up to a $45 million charge related to older technology licenses.
In addition to their earnings, AMD also announced a seventh amendment to their wafer agreement with Global Foundries, outlining costs for the next couple of years.
For Q1 2019, AMD expects revenue to be about $1.25 billion, plus or minus $50 million, which will be a 24% decrease over Q1 2018, due to the lack of cryptocurrency sales, but offset but CPU sales.
Source: AMD Investor Relations
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