AMD mixes Navi and Zen 2 details into Q1 financials

AMD had something of a disappointing first quarter of 2019 according to the company's first quarter financial report. Revenue, operating income, and net income were all down while operating expenses were on the rise. Gross margin was actually up bit. Let's see how it looks in table form.

Q1 2019 Q1 2018 Y/Y Change
Revenue $1.27 billion $1.65 Billion -23%
Gross Margin % 41% 36% +5 pp
Operating Expense $543 million $477 million +$66 million
Operating Income $38 million $120 million -$82 million
Net Income $16 million $81 million -$65 million
Earnings Per Share $0.01 $0.08 -$0.07

Source: AMD

CEO Lisa Su said in the company's conference call that demand for Ryzen 7 and 5 desktop CPUs is strong. Dr. Su also says that Ryzen mobile sales are on track to increase by 50% in this calendar year. Graphics sales weren't as rosy, though. Channel sales for the quarter were down from the year-ago quarter, when crytpocurrency mining was still a big boom industry. However, she also says that Radeon Vega GPU sales were up "a strong double-digit percentage" both year-over-year and sequentially due to increased adoption across OEM, gaming, and data center customers. 

The company expects the second quarter will turn things around a bit. CFO Devinder Kumar says to expect revenues in the $1.52 billion range. While that would represent a substantial sequential uptick, that figure still represents a 13% year-over-year decline. The company expects the graphics sales decline to continue into the next quarter due to lower graphics channel sales, lower semi-custom revenue, and "negligible blockchain-related GPU revenue."

The conference call also provided a look into the near-future for AMD. Su says that the second quarter represents a "transition" for the company's portfolio. AMD's CEO confirmed earlier rumors that the chip maker expects to start shipping 7-nanometer products in the third quarter. Su specifically mentioned Rome-based EPYC processors and Navi graphics processors. AMD has already confirmed that Dr. Su will deliver a keynote presentation at Computex, so we'll likely find out more about the company's 7-nanometer plans then. 

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