Revenue up 19%
When Advanced Micro Devices (AMD) reported its 2Q17 earnings on July 25, its stock price had already more than doubled over the last 12 months. The strong earnings (QQQ) report drove the price up further.
AMD reported revenue of $1.22 billion, up 19% from a year earlier and above the consensus estimate of $1.16 billion. The company posted adjusted EPS (earnings per share) of $0.02, ahead of the break-even EPS Wall Street was expecting.
AMD breaks profit drought
The above chart shows AMD’s 2Q17 financial highlights. In addition to the meteoric rise of its stock and strong overall earnings, AMD has attained other milestones.
The company was able to end a long profit drought in its computing and graphics division, which includes graphics and desktop processors. The division registered operating income of $47 million, a sharp rise from the -$81 million it reported a year earlier. The division reported an operating profit for the first time in three years.
Revenue in the division came to $659 million, up 51% from a year earlier, outpacing estimates that called for growth of 49%. The launch of its Ryzen chip for personal computers was responsible for much of the improvement.
Eyes on Epyc chip
AMD’s current quarter, 3Q17, is being closely watched as it will reflect the progress of the company’s recently launched Epyc chip for servers. The Epyc chip is AMD’s attempt at penetrating the data center market, which is dominated by Intel (INTC). The company also hopes Epyc will give it an edge over NVIDIA (NVDA), its other US (SPY) rival in the data center processor market.