AMD reported its earnings for the third quarter of 2018 today. The company took in revenue of $1.65 billion during the quarter, up 4% on the year, and operating income of $150 million, up 26% on the year. Gross margin rose to 40%, up four percentage points from this time last year, and net income grew to $102 million, up 67%.
|Q3 2018||Q3 2017||Change|
|Revenue||$1.65 billion||$1.58 billion||Up 4%|
|Operating income||$150 million||$119 million||Up 26%|
|Net income||$102 million||$61 million||Up 67%|
|Gross margin||40%||36%||Up four percentage points|
The Computing and Graphics business took in $938 million in revenue, up 12% year-on-year. The company said it enjoyed strong sales of its Ryzen desktop and mobile products, but that graphics revenue weakened from this time last year—almost certainly because of the cessation of graphics-card demand in the cryptomining community. In fact, the company called revenue from cryptomining sales "negligible" for the quarter, down from an "approximately high single digit" total of AMD's revenue this time last year.
The company says the Computing and Graphics unit experienced a 14% quarter-on-quarter decline in revenue, in part because of a high channel inventory of graphics products. That glut was offset by increased Ryzen processor revenue. The average selling price of AMD's client processors rose both year-on-year and quarter-on-quarter, while graphics product ASP fell both year on year and quarter on quarter thanks to lower channel sales of those products.
The division took in $100 million in operating profit, up from $73 million this time last year but down from $117 million last quarter. The company cites a "richer client product mix" and IP-related revenue, at least $86 million of which came from AMD's joint venture with THATIC. The company says lower graphics revenue was to blame for the quarter-on-quarter decline.
The Enterprise, Embedded, and Semi-Custom business took in $715 million in revenue, a 5% decrease on the year. The company says the decline came from lower semi-custom product and IP-related revenues, though increasing server sales offset that decline. Operating income for the division was $86 million, up from $74 million a year ago. The company says its "richer server and semi-custom product mix" helped boost its operating profits in the division. The All Other bucket got a $36 million hole in its bottom, a larger operating loss than the $28 million figure from a year ago.
For its fourth quarter of 2018, AMD expects revenue of $1.45 billion, plus or minus $50 million, which would represent an 8% increase year-on-year. The company further expects its non-GAAP gross margin to be 41% for the next quarter, an increase fueled by growth in Ryzen, Epyc, and data-center graphics products. That increase comes even without the "low-double-digit" percentage of crypto-related revenues that AMD says it recorded last year.