=Advanced Micro (AMD) reported earnings on Wed 24 Oct 2018 (a/h)

Advanced Micro beats by $0.01, misses on revs; guides Q4 revs below consensus

• Reports Q3 (Sep) earnings of $0.13 per share, excluding non-recurring items, $0.01 better than the S&P Capital IQ Consensus of $0.12; revenues rose 4.4% year/year to $1.65 bln vs the $1.71 bln S&P Capital IQ Consensus.
• Blockchain-related GPU sales in the third quarter were negligible. In the third quarter of 2017, blockchain-related GPU sales were approximately high single digit percentage of total AMD revenue.
• Gross margin grew to 40 percent, up 4 percentage points year-over-year, primarily driven by the ramp of new products, including Ryzen and EPYC processors. On a sequential basis, gross margin was up 3 percentage points primarily driven by IP-related revenue and the ramp of new products. Excluding IP-related revenue and memory and inventory related adjustments, gross margin would have been 2 percentage points lower.
• "We delivered our fifth straight quarter of year-over-year revenue and net income growth driven largely by the accelerated adoption of our Ryzen, EPYC and datacenter graphics products," said Dr. Lisa Su, AMD president and CEO. "Client and server processor sales increased significantly although graphics channel sales were lower in the quarter. Looking forward, we believe we are well positioned for further market share gains as we continue making significant progress towards our long-term financial targets."
• Co issues downside guidance for Q4, sees Q4 revs of $1.40-1.50 bln vs. $1.59 bln S&P Capital IQ Consensus.
  • Sees non-GAAP gross margin to increase to approximately 41 percent, driven by sales growth of Ryzen, EPYC and datacenter GPU processor sales. For comparative purposes, Q4 2017 revenue was $1.34 billion, adjusted for the ASC 606 revenue accounting standard, and included blockchain-related GPU sales of approximately low double-digit percent of overall AMD revenue.